‘TIS THE SEASON FOR RELIGIOUS ACCOMMODATIONS

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By: Claudia D. Orr, Attorney, Plunkett Cooney 

 

‘Tis The Season For Religious Accommodations

 This time, the religious accommodation case was brought under Michigan’s Elliott-Larsen Civil Rights Act, MCL 37.2101, et seq.  Quite frankly, I can’t recall ever seeing one brought under Elliott-Larsen rather than Title VII, so my interest was immediately piqued. After all, it is the time of year when requests are often made.

My initial thought was that the plaintiff may have failed to file a charge with the Equal Employment Opportunity Commission (“EEOC”) within 300 days of the claim.  Or perhaps the plaintiff’s attorney just wasn’t comfortable practicing in federal court.  Or, maybe, an employer’s obligations are greater under state law. But it was odd to see this claim being brought under state law.

We know under Title VII, federal courts routinely recognize that any accommodation that is more than a de minimus cost to the employer is not required.  Of course, the EEOC takes the position that an employer has a much greater burden to accommodate, nearing an undue hardship standard similar to that required by the Americans with Disabilities Act.  But, what are an employer’s obligations under state law? Let’s look at Robinson v JCIM, LLC, an unpublished decision released by the Court of Appeals on November 27, 2018.

Plaintiff Thomas Robinson began working for the Defendant JCIM, LLC, an automotive interiors company in Grand Rapids, as a racker loader in the paint department on the first shift.

In January 2015, plaintiff, a Muslim, asked to leave work early, at 2 p.m., on Fridays so he could engage in congregational prayer, known as Jumu’ah. JCIM allowed plaintiff to do so because, as a racker loader, plaintiff had some flexibility in his schedule because he worked independently racking parts. Typically there were five or six such racker loaders grabbing parts off the line, so when one was missing, the others had to work harder but the line kept moving.

In July 2015, Defendant Yanfeng US Automotive Interior Systems II, LLC took over the ownership of JCIM, and allowed plaintiff to leave work early until October 2015, when plaintiff accepted the position of an assembler. Assemblers work as part of a team, so when an assembler is missing, a replacement has to be found to keep the presses operating so customer needs can be met. Therefore, Yanfeng told plaintiff on October 30, 2015, he would no longer be permitted to leave early.

Despite being told he could no longer leave early, plaintiff disregarded the instruction and continued to do so.  By late November, he had accumulated 19 points for unexcused absences. Under the Collective Bargaining Agreement, an employee is subject to termination at 21 points. Company documents showed that the human resources manager had met with plaintiff on November 10, and 19 to warn plaintiff he couldn’t leave, but offering to allow plaintiff to return to his former position as a racker loader. Plaintiff was also told he could stay an assembler but work on the third shift so that his work hours would not interfere with Friday prayer.

By November 23, 2015, plaintiff was given a final warning. Plaintiff grieved the warning, seeking removal of the points and to require Yanfeng to honor its prior agreement allowing him to leave for Friday prayer.  On December 7, 2015, plaintiff left early and was fired.

In his lawsuit, plaintiff claimed that Yanfeng discriminated against him by demanding he abandon his religious practices, failing to offer him any “alternate” accommodation and applying attendance points based on his religious observances. Defendants argued, among other things, that Elliott-Larsen does not require an employer to accommodate religious beliefs.

So, how did the appellate court rule on this issue? The court stated:

[A]t its core, plaintiff’s case concerns a claim that Yanfeng was required to accommodate his religious practices and failed to do so, thereby establishing religious discrimination. We are not aware of any published, or even unpublished, Michigan cases answering the question whether [Elliott-Larsen] authorizes a religious-accommodation case.  Defendants have directed us to a number of unpublished federal cases that indicate that [Elliott-Larsen] does not include an affirmative duty to accommodate an employee’s religious beliefs.  One published federal opinion, Wessling v Kroger Co, 54 F Supp 548, 552 (ED Mich, 1982), states, without any reasoning, analysis, or explanation, that there is no requirement to accommodate religious practice under [Elliott-Larsen].  We decline to resolve the question…

So, after all of that build up, we still don’t know!  Not definitively. Is my disappointment showing? Until this issue is decided in a published opinion by the Michigan Court of Appeals or the Michigan Supreme Court we can only do what these defendants did – rely on decisions that are only persuasive and not binding on lower courts.

In the meantime, what should an employer do when an employee asks for time off to observe religious practices?  If practicable an employer may wish to consider such things as the following:

  • schedule the employee off on his/her religious holidays and have others of different faiths fill in
  • allow the employee to switch days off with coworkers and “encourage” his/her coworkers to consider doing so
  • offer employees a “floating” holiday instead of their birthday off which can then be used for a holy day
  • be flexible with the employee’s use of paid time off
  • permit the employee to leave work and return a few hours later to complete the shift after the religious observance

Remember, under Title VII, more than a di minimus cost makes the proposed accommodation unreasonable.

In addition to time off, other requests may be made such as allowing piercings, beards, a quiet space for prayer, a variation in the dress code, etc. Employers should be flexible when operations don’t suffer, and safety or health issues are not created. Flexibility shows tolerance and encourages diversity which in turn makes it easier to recruit and retain talent in this competitive labor market. If you receive a request and need legal guidance, consult an experienced employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2018.

 

Early Christmas Present for Michigan Employers: Earned Sick Time Act Overhauled and Wage Hike Delayed

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By: Miriam L. Rosen

 

Early Christmas Present for Michigan Employers:
Earned Sick Time Act Overhauled and Wage Hike Delayed

 

The Michigan legislature just gave employers an early Christmas present by scaling back on the terms of broadly-worded minimum wage and earned sick time laws that started out as citizen-initiated ballot proposals.

When the Michigan legislature adopted the minimum wage increase and earned sick time proposals in September 2018, the intent was to keep both provisions off the November ballot.  By adopting the proposals “as is”  before putting them to a popular vote, the legislature hoped to preserve the opportunity to amend the terms of both acts by simple majority votes during the post-election lame-duck session.  In contrast, if the provisions had passed by popular vote in November, a 75% vote by the legislature would have been required to amend the provisions.

As originally passed in September, the acts would have raised the minimum wage to $12 by 2022 and would have given many full time employees the opportunity to use up to 72 hours of paid sick time a year.

The Amended Terms

The amended bills, passed by the Michigan legislature on December 4, 2018, significantly scale back on the timing of the original minimum wage increase and the scope of the earned sick time law.

The amended minimum wage bill gradually increases the state’s $9.25 minimum wage to $12.05 an hour by 2030 as opposed to $12 by 2022.   As a first step, the minimum wage would increase to $9.45 in 2019.

The legislature also took a machete to the Earned Sick Time Act.  As originally passed in September, the broadly-worded law allowed for paid time off for sickness as well as a host of other reasons. The law, which encompassed employers with as few as 11 employees in the requirement to provide up to 72 hours of paid sick time annually, also included other provisions that would have made administration difficult for employers.

As amended, sick time law now excludes employers with under 50 employees.  In addition, under the amended law, employees working 35 hours per week can earn up to 40 hours of paid leave per year, instead of the 72 hours in the original act.  In terms of administering the law, the amended act now requires that employees comply with an employer’s “usual and customary notice, procedural, and documentation requirements for requesting leave.”  The Earned Sick Time Act includes many other provisions with which employers will want to familiarize themselves.

The two amendments will now go to Governor Snyder for his signature.  If signed, the new acts will be effective 91 days after adjournment of the 2018 legislative session, which will make them effective at the end of March 2019.  

 There will be Challenges

The amendments by the lame duck legislature are sure to face challenges.  In a legal opinion issued on Monday, December 4, 2018, outgoing Republican Attorney General Bill Schuette advised that the state constitution requires a 75% vote in both chambers to change voter-approved laws, but that it imposes no “express limitations” on amending citizen-initiated laws passed by the legislature.

Democratic legislators are, however, crying foul.  They note that a 1964 opinion by a Democratic attorney general determined that changes cannot be made in the same legislative session in which the law was passed.  And, advocates for paid sick time have already promised another ballot initiative in 2020 to restore the original terms.

All of this means that these “gifts” will likely come with some headaches for employers.  Employers should consult with their employment lawyers about the status of the amended legislation and for advice for implementation.

This article was written by Miriam L. Rosen, who is Chair of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2018.

Federal Appellate Court Reminds Employers That Fourth Amendment Standards Must Support Agency Inspections

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By:  Julia Turner Baumhart, Kienbaum Opperwall Hardy & Pelton, P.L.C.

 

Federal Appellate Court Reminds Employers That Fourth Amendment Standards Must Support Agency Inspections

 

            Employers routinely encounter demands from the alphabet soup of Department of Labor sub-agencies:  OSHA, OFCCP, OWCP, W & H (including FLSA and FMLA variations), among others.  Not always as obvious or recognizable, however, are agency attempts to overreach in their demands.  This is often found in the case of on-site inspections or audits.

            Recently, an Eleventh Circuit federal appellate panel reminded employers that they may be overlooking a basic fundamental right.  Simply because a DOL inspector shows up after a workplace accident or to audit an employee complaint does not entitle the agency to unfettered access to the employer’s premises.  Specifically, in United States v. Mar-Jac Poultry, Inc., the court reminded employers of their Fourth Amendment protection against unreasonable searches.

            The Mar-Jac case arose out of an electrical injury at a poultry processing plant in Georgia.  As required by law, Mar-Jac reported the electrical accident to the Occupational Safety and Health Administration (“OSHA”), the following day.  Several days later, an OSHA inspection team arrived and demanded access, not only to the alleged hazards involved in the accident, but to the entire facility.  Mar-Jac refused access except to the accident site and any tools involved in the accident, but did provide access to certain paperwork including its “OSHA 300 logs,” in which it recorded work-related illness and injuries.  Based on this limited access, OSHA found nine potential OSHA violations, only three of which related to the accident.  The remaining six citations involved areas allegedly common to the poultry processing industry.

            Using these findings, OSHA secured a federal warrant to expand its earlier inspection to again include the entire facility.  Mar-Jac, however, successfully quashed the warrant as to five of the nine potential violations.

            Affirming the lower courts, the Eleventh Circuit again reminded employers that the DOL and its sub-agencies do not have a right to unlimited access to inspect employer premises.  Rather, an agency’s rights extend to two types of on-site inspections or audits.

  • First, the DOL can select the facility based on a general administrative or legislative plan where the selection is based on neutral criteria.
  • The second, and only other basis for inspection, is where the agency has specific identifiable evidence of an existing violation.

While the DOL does not need a warrant to initiate either type of inspection, it must obtain a warrant if the employer refuses to consent on Fourth Amendment grounds, i.e., that the search is not a reasonable one in its inception or scope.  And the required probable cause to overcome the employer’s objection is a higher burden for the government where the agency is relying on the second basis – the specific evidence of an existing violation.  Somewhat higher scrutiny applies to alleged existing violations because, absent legislative or administrative standards, there is a greater possibility that the agency has either targeted the employer or unreasonably expanded the search for purposes of harassment.

            The court agreed in this case that OSHA had unreasonably expanded the search, primarily by using the OSHA 300 logs to equate the existence of a workplace injury or illness with an OSHA violation, without regard to causation.  As the court observed, “the [OSHA] Regulations provide that ‘recording or reporting a work-related injury, illness, or fatality does not mean that the employer or employee was at fault, that an OSHA rule has been violated, or that the employee is eligible for workers’ compensation or other benefits.’”

The same standard pertinent to OSHA audits applies to on-site inspections by the other DOL sub-agencies.  Two caveats to bear in mind, however.  First, once the employer consents to the inspection – whether or not the consent is informed – it probably has waived its Fourth Amendment protection, at least to the extent of its consent.  And second, employers should carefully consider the potential impact on their agency relationships before objecting.  Both caveats suggest a reasoned approach based on fulsome advice and counsel before committing to either path.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  November 2018. 

 

 

 

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DOL Wage & Hour Stepping Up Reliance on Opinion Letters

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By:  Julia Turner Baumhart, Kienbaum Opperwall Hardy & Pelton, P.L.C

 

DOL Wage & Hour Stepping Up Reliance on Opinion Letters

 

            The Trump Administration’s reinstatement of Wage & Hour Division Opinion Letters – a practice suspended during the Obama Administration – is gaining momentum.  On November 8, 2018, the Department of Labor issued four Opinion Letters on a variety of topics ranging from tipped employee wage credits to much narrower topics.

            The most encompassing Opinion Letter – that dealing with tip credits under the Portal-to-Portal Act – reissued a letter issued in the closing moments of the George W. Bush Administration that the successor administration promptly mothballed.  The new letter – FLSA 2018-27 – reissued the old letter virtually verbatim to distinguish between tipped employees in dual jobs (where one job is a tipped occupation but not the other) and tipped employees who perform both tip-generating and non-tip generating duties.

            In the case of dual jobs, the letter clarifies what should be common sense: the employer may take a tip credit only for those hours spent performing the tipped job.  The letter provides the example of the hotel maintenance employee who also serves as a hotel waiter.  The FLSA would require the hotel to pay minimum wage for any hours worked in maintenance but allow the hotel to take advantage of a tip credit for hours spent as a waiter – a bright line test.

            The standard applied to tipped employees who also perform non-tipped duties presents a much fuzzier line.  The letter provides the example of the waiter who also spends time in non-tip generating duties such as cleaning and setting tables, toasting bread, making coffee, occasionally washing dishes or glasses, or vacuuming before or after closing.  Earlier guidance implied that, under the above circumstances, any allocation of non-tipped duties that exceeded 20 percent of working time could not be eligible for a tip credit.

            Opinion Letter 2018-27 rejects the 20 percent ceiling on non-tipped duties as imposing an unrealistic burden to monitor and track minute-by-minute job performance.  Rather, the new standard allows credit for duties listed as core or supplemental to the specific tip-producing occupation on the Occupational Information Network (O*NET) or in 29 C.F.R. § 531.56(e), provided the duties are performed contemporaneously with or immediately before or after duties directed at serving customers.  The specific occupational duties considered core or supplemental for each tipped occupation can currently be found at https://www.onetonline.org/ link/summary/35-3031.00.

            Another November 8 Opinion Letter, FLSA 2018-25, addresses when exempt salaried employees may receive additional hourly compensation for hours worked without endangering the exemption.  The opinion letter addresses engineers and senior designers, classified as professional salaried employees, who receive a guaranteed weekly salary of $2,100, regardless of the number of hours worked during the week.  However, those employees also could earn $70 for every hour worked in excess of 30 per week.  As a result, some engineers were earning a weekly average salary of up to $3,761.

            Opinion Letter 2018-25 provides that the guaranteed weekly – or “usual” – salary has to bear a reasonable relationship to the amount actually paid.  A reasonable relationship exists provided the average weekly salary does not exceed 1.5 times the usual salary.  Moreover, the ratio has to be determined on an employee-by-employee basis.  Under the circumstances presented, the usual or guaranteed salary of $2,100 per week would support an average actual salary of up to $3,150.  Presumably, then, the employer would need to increase  the usual or guaranteed weekly salary of any engineer or senior designer whose average actual salary exceeded $3,150 to avoid endangering the exempt status of that employee.

            The remaining two opinion letters deal with narrower topics.  One addresses when swimming pool or similar recreational operators supporting multi-faceted operations, such as hotels and apartment complexes, are entitled to claim relief from wage and hour laws as seasonal amusement or recreational establishments.  For this to occur, according to FLSA 2018-26, those in the employer’s employ must work at (1) an establishment; (2) frequented by the public, including for a non-prohibitive fee; (3) that is for amusement and recreation.

            The fourth letter is narrower still, answering the question of whether a nonprofit, private volunteer fire department contracting with a state or local government to provide fire protection services to the public can benefit from the partial exemption from overtime requirements applicable to employees of public agencies.  This Opinion Letter, FLSA 2018-24, concludes that private fire departments that are not directly responsible to public officials or the general public and who are designated in their contracts as independent contractors do not qualify for the partial exemption.  This is true even if the department receives partial funding from a state or locally imposed fee.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  November 2018. 

Michigan voters say yes to recreational marijuana. But employers get the say on workplace policies.

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By: Miriam L. Rosen

 

Michigan voters say yes to recreational marijuana. But employers get the say on workplace policies.

On Tuesday, Michigan voters had their say. One thing that they said loud and clear was “YES” to legalizing recreational marijuana.

As the saying goes, “elections have consequences.”  For Michigan employers, a consequence of the new law will be how recreational marijuana affects the workplace.    This means Michigan employers must understand the provisions of the law and must make decisions about workplace policies.

The Terms of the Law

 Approved through a public referendum, the new law, officially named the Michigan Regulation and Taxation of Marijuana Act, makes Michigan the first Midwestern state to approve recreational use of marijuana. The Act amends existing Michigan law to allow the following:

  • personal possession and use of marijuana by people 21 and older;
  • the lawful cultivation and sale of marijuana and industrial hemp by people 21 and older;
  • taxation of revenue from commercial marijuana facilities;
  • creation of administrative rules and establish penalties for violations.

Significantly for employers, the Act also includes a very clear statement on legal recreational marijuana and the workplace.

“This act does not require an employer to permit or accommodate conduct otherwise allowed by this act in any workplace or on the employer’s property.  This act does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marijuana. This act does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person’s violation of a workplace drug policy or because the person was working while under the influence of marijuana.”  (Emphasis added).

To summarize, employers can refuse to hire job applicants and discipline or fire existing employees if they test positive for marijuana in violation of a workplace drug policy or are under the influence while working.    This is consistent with the Michigan Medical Marijuana Act that voters approved in 2008.

The new law will go into effect ten days after the election results are certified – making it  effective in mid-December 2018.   This gives Michigan employers some time to think about – and plan for – the consequences of legal recreational marijuana.

Takeaways for Employers

Here are some takeaways for employers to consider:

  • Employers can implement and enforce workplace drug policies that prohibit employees from being under the influence of marijuana at work and can refuse to hire applicants and discipline/terminate employees who test positive for marijuana.
  • The Act specifically refers to conduct that is “in violation of a workplace drug policy.” So employers, now is a (really) good time to pull out that policy and make sure that it is up-to-date.
  • Employers should state clearly and directly how recreational – and medical – marijuana will be handled under their workplace drug policy.
  • Employers do have choices here. Employers can, but are not required to, drug test employees and discipline/terminate for a positive test for marijuana.
  • Data from other states where recreational marijuana is legal indicates that some employers are modifying drug screening practices to exclude marijuana from pre-employment testing. Those employers say that they are just responding to the particular realities of the need for workers.
  • Of course, decisions about testing and other workplace restrictions should be thoughtfully considered and based on the specifics of each workplace.
  • Educate employees on the company workplace drug policy. Since employees may not have parsed the finer points of the new law, they may assume that since recreational marijuana is legal, they can’t be fired for a positive test.  It would be unfortunate to see someone’s job “go up smoke” over a misunderstanding.
  • For employers with federal government contracts, marijuana is remains an illegal substance under federal law and compliance with applicable federal regulations is required.

The new recreational marijuana law gives employers broad ability to limit the impact of recreational marijuana use on the workplace. However, it does not require it.  Just like the voters of Michigan, employers have a choice to make. Employers – especially those with multi-state operations – are encouraged to seek the guidance of an experienced employment lawyer in making those decisions and implementing workplace drug policies.

This article was written by Miriam L. Rosen, who is Chair of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. November 2018.

 

 

 

 

 

 

 

 

 

The EEOC Takes On The Justice Department

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By:  Claudia D. Orr

 

The EEOC Takes On The Justice Department

 

Yes, we live in confusing times. Bi-partisanship seems all but over.

But now, there is a split within the Trump administration between the U.S. Department of Justice and the Equal Employment Opportunity Commission (EEOC) concerning coverage under Title VII, the federal civil rights law, for employees who are transgender.

This is quite remarkable. Let’s look at how this controversy developed.

You might recall that a little over a year ago, Attorney General Jeff Sessions issued a memo announcing a reversal in a three-year-old Justice Department policy that transgender workers were protected under federal law from discrimination.

In his Oct. 4, 2017 memo, Sessions stated “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.” Sessions’ memo further indicated that the “Department of Justice will take that position in all pending and future matters…” Well, Sessions has now made good on that promise.

Pending before the U.S. Supreme Court is a petition for review of R.G. & G. R. Harris Funeral Homes, Inc. v. EEOC (the “funeral home case”), one about which I have previously written. This is the case that originated in Inkster, Michigan involving the termination of a funeral home worker who had been presenting as a male after announcing she was transitioning to a female and that in the future she would no longer come to work dressed as a man, but would dress as a woman.

In July, the funeral home filed a petition seeking review by the Supreme Court of the opinion issued by the U.S. Court of Appeals for the Sixth Circuit. Only the Justice Department has the authority to represent the federal government before the Supreme Court. Last week, the Justice Department, on behalf of the EEOC which prevailed at the Sixth Circuit, filed a brief with the Supreme Court asking the justices to consider reviewing the Sixth Circuit opinion, but only if the court grants review of Altitude Express, Inc v Zarda (2nd Cir.) and/or Bostock v Clayton County (7th Cir.). Both of those decisions ruled that Title VII protects workers from discrimination based on sexual orientation.

The Justice Department’s brief argues that until these two circuits ruled in this manner (both sitting en banc, meaning all of the judges on the bench at that circuit) all federal circuit courts had unanimously concluded that Title VII afforded no such protection. Because the Sixth Circuit relied on those opinions when ruling in favor of the EEOC in the funeral home case, it asks the justices to review the funeral home case if it reviews the correctness of those opinions.  But, if it denies the petitions to review those two cases (which may signal the justices believe those decisions were correctly decided), then it should also deny review of the funeral home case at this juncture (apparently concerned about an adverse ruling).

The most shocking statement in the Justice Department’s brief, which was filed on behalf of the Respondent, the EEOC, is “To be sure, the United States disagrees with the court of appeals’ decision.” Seriously? The respondent (EEOC) prevailed in that decision!  This conflict between the Justice Department and the EEOC is an astonishing development in the administration.

Solicitor General Noel Francisco, who represents the federal government before the Supreme Court, said the Sixth Circuit got it wrong because “sex” as defined under Title VII does not refer to gender identity. But the EEOC was the party that convinced the Sixth Circuit that the term did.

The EEOC is not backing down from its position. Affording protections to the LGBTQ community is one of the EEOC’s strategic initiatives and acting Chair Victoria Lipnic (who is a Republican) intends on pressing forward unless the Supreme Court rules against the EEOC’s position. Acting Chair Lipnic was tapped for this role by President Trump on Jan. 25, 2017.

The EEOC is composed of five members appointed by the President, who also appoints the general counsel to provide direction and supervision to the EEOC’s litigation. Currently this position is vacant along with two vacant member positions because the nominations have stalled in Congress.

So what now for employers? I am advising my clients to continue to include sexual orientation and transgender as protected statuses in their equal employment opportunity and harassment policies.

Sooner or later, this will all be sorted out. In the meantime, employers should be aware that the EEOC will continue to protect the rights of LGBTQ employees and failure to include these statuses in the policies will be adverse to any defense of such discrimination claims.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2018.

 

INDIVIDUAL ARBITRATION AGREEMENTS MAY CUT THE CLASS BY NEARLY A THIRD

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INDIVIDUAL ARBITRATION AGREEMENTS MAY CUT THE CLASS BY NEARLY A THIRD

By: Claudia D. Orr

I just want to provide a quick update to an article I wrote at the end of August concerning the Sixth Circuit’s decision that upheld individual arbitration agreements requiring employees to bring claims individually, and not part of a class or collective action. You will recall that in Gaffers v Kelly Services, Inc the employee had unsuccessfully challenged his arbitration agreement claiming it interfered with his rights under the Fair Labor Standards Act to join a collective action and his Section 7 rights to engage in concerted activity under the National Labor Relations Act. The latter challenge had been held invalid by the US Supreme Court earlier in the year in Epic Systems Corp v Lewis.

Well, now there is a case showing the real practical effect of individual arbitration agreements.  It comes out of California so the underlying claims (which include mandatory break and meal periods) wouldn’t occur in Michigan (unless the employee was a minor), but the impact of the individual arbitration agreements is clear and applicable here.

The case is Vigueras v Red Robin International, Inc, which was brought in the US District Court for the Central District of California. Manuel Vigueras filed a motion seeking class certification for servers, bartenders, cocktail servers, bussers, host/hostesses, cooks, expediters and dishwashers working in 71 Red Robin restaurants in California. The proposed class constituted more than 18,000 employees. The potential damages for this many employees are staggering.

However, beginning in September 2016, Red Robin began to require its employees to sign pre-dispute arbitration agreements that waived the right to bring certain claims in a class action. Red Robin indicated in one part of its brief that nearly 5000 employees had signed such agreements.

In the end, the court certified the proposed class, but held it has the authority to exclude all employees who had signed the arbitration agreements, except those who had signed them during the pendency of the class litigation and were not told about the litigation.  Thus, the court ordered discovery on this issue and it will be reargued. In the meantime, as to those employees, the court certified a subclass, the “Arbitration Subclass”. Those employees who either signed the agreements before the class action was filed or signed them after the filing but knew about the action will not remain in the class action  Those excluded employees will have to pursue their claims, if at all, on an individual basis in arbitration.

Can you imagine if Red Robin had required individual arbitration agreements years earlier such that everyone in the putative class was bound to bring their claims on an individual basis?  Individual wage claims seldom have sufficient damages to interest plaintiffs’ attorneys who generally work on a contingency fee basis.  But, here, there will still be well over 10,000 employees in the class making this a very lucrative case for counsel and a very expensive one for Red Robin.

I recently conducted a webinar called “What’s new and what to do about it” that covered a variety of topics, including arbitration agreements.  Whether such agreements are right for your company will require an analysis of whether your industry is a likely target of a class action (restaurants and home health care companies are, for example), the jurisdiction and venue of claims that may be brought, issues concerning potential appeals, and the costs of arbitration itself.

Arbitration agreements are not right for all companies and, even if yours would benefit from such agreements, a decision has to be made concerning which employees will be provided the agreements and which claims will be subject to it.  An experienced employment attorney, such as the author, can assist you in making these decisions.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2018.

The ADA and Michigan Persons with Disabilities Civil Rights Act – Differences Matter!

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By: Claudia D. Orr, Attorney, Plunkett Cooney 

 

The ADA and Michigan Persons with Disabilities Civil Rights Act – Differences Matter!

We often lump together state and federal civil rights laws but there are some major differences. For example, I recently advised readers that the US Court of Appeals for the Sixth Circuit just held that the tender back rule does not apply to federal civil rights claims. But that doctrine is still valid under state civil rights laws. As a reminder, the tender back rule requires the return of the consideration given for a release of claims at or before the time the release is challenged and a lawsuit if filed.  I am still upset with the 6th Circuit’s ruling, but I digress.

Other differences include whether there can be individual liability (state yes, federal no) or punitive damages which are intended to punish (state no, federal yes), whether an administrative charge must first be filed with a civil rights agency (state no, federal yes), whether you can shorten the limitations period by contract (state yes, federal maybe if it is drafted correctly) and some of the prima facie cases/burdens of proof, to name a few.

Today’s case, Cook v DTE Energy Corp Serv, LLC, an unpublished decision of the Michigan Court of Appeals released this month, demonstrates some differences when it comes to state and federal disability civil rights laws. Let’s look at what happened and then I will tell you what caught my eye in this case.

Plaintiff Cook began working for Mich Con in 1980 and became a DTE employee after the merger. She was a business support specialist and was expected to submit weekly production schedules documenting her work. Specialists are evaluated based on their productivity (90-120% “fully meets expectations”, 80-89% “meets many”, below 80% “does not meet”). The ratings are calculated based on days the specialist actually worked and did not reflect time off.  In addition, Cook constantly failed to turn in her production reports (which also adversely affected her production numbers), and this became a major issue.

Cook also had a history of taking time off from work. She had intermittent leave under the Family and Medical Leave Act (“FMLA”) in 2010 and 2011 to care for her father, and she had various injuries and illnesses that caused her to take additional time off during periods when she did not have an active, approved FMLA leave.

From late 2013 through October or November 2014 Cook missed over 150 hours during the “rolling” 12 month period, which burdened other employees. Cook was instructed she should minimize her sick time. After Cook had been given a coaching and a documented verbal warning for attendance, she wrote on the warning notice that she would pursue an intermittent FMLA leave for her absences.

Following her evaluation for 2013, Cook was placed on a performance improvement plan because her production reports failed to provide sufficient detail. By April 2014, Cook showed improvement in her production, but still failed to provide sufficient detail in her production reports.  Cook successfully completed the performance improvement plan in July 2014, but was warned that if she failed to maintain her level of performance, she could be terminated. Cook failed to do so. Her mid-year performance review in September 2014 indicated that Cook’s production had already dropped to 36% the very next month following the performance improvement plan and she had stopped submitting her production reports.  Cook’s 2014 evaluation indicated that she was “at risk” and “off track”.

In September 2014, Cook suffered three strokes and was hospitalized. Because of confusion and vision impairment, her doctor said she was not fit for work.  Cook took a leave of absence from work.  The leave was extended through December 2014, and her doctor provided a tentative return to work date of March 2, 2015. While her doctor opined that she was totally disabled, an independent medical examination on January 13, 2015, determined that there were no medical conditions that would prevent her from returning to work. DTE sent Cook a letter asking her to return to work on January 27, 2015 and she returned on February 3, 2015.

Cook failed to report to work on March 3, 2015.  Cook said she thought she had informed “someone” that she was not going to be in on that day, but DTE terminated her employment determining that this absence was a no call/no show.

Cook initiated a lawsuit under the Michigan Persons with Disabilities Civil Rights Act (“MPDCRA”) in March 2016.  We can only assume that she sued under state law because she had failed to timely assert a charge with the Equal Employment Opportunity Commission within 300 days as required under the Americans with Disabilities Act.

There were various claims asserted under MPDCRA (discrimination because of disability or perceived disability), harassment and hostile work environment because of disability and retaliation for taking medical leave. What puzzles me though is why a claim under FMLA was not pursued.  Cook also alleged that DTE failed to promote her because of her race in violation of the Elliott-Larsen Civil Rights Act, but she later voluntarily dismissed that claim (perhaps because of her documented performance issues). Eventually, all of her claims were dismissed when the trial court granted DTE’s Motion for Summary Disposition finding Cook failed to prove one or more elements of each claim.

Cook appealed and the Michigan Court of Appeals in a detailed analysis affirmed the trial court’s dismissal of each claim for various reasons.  But those reasons are not what this article is about.

Two things caught my attention in this case and reminded me of some basic differences between the MPDCRA and the ADA. First, the appellate court found that, while Cook had shown she had various medical conditions, she failed to prove she had a “disability”. This required a showing that she was substantially limited in her ability to perform some major life activities. The court noted that while Cook had discussed the fact that she had suffered strokes causing her to be unable to return to work for a period of time, the appellate court found that she failed to make this argument in “that portion of her response in which she argued that … she had a qualifying disability” under the act.

Second, the court also emphasized that a disability must not prevent the employee from performing the duties of her position, with or without an accommodation.  MCL 37.1103.  The court found that DTE had plenty of documentary evidence (from Cook’s physician, the Social Security Administration and the Unemployment Agency) showing that Cook was disabled and unable to work during the “relevant time period”.

So, think about this.  While the court recognized that Cook had medical conditions, it found that she failed to prove she had a disability, but the court also found she was “disabled” and unable to work during the “relevant time period.”

Would a court’s focus and findings on these two issues be the same under the Americans with Disabilities Act (“ADA”)? Probably not today.  Back in the “good ole days” before the ADA was amended, the act required plaintiffs to walk a fine line between being sufficiently incapacitated to rise to the level of a disability, but not so disabled that the person could not perform the essential functions of their position with or without a reasonable accommodation. This was a very difficult balance to achieve for plaintiffs.

But the amendment to the ADA in 2008 changed this.  Now, the EEOC and some courts find temporary injuries (such as a torn tendon) rise to the level of “disability” under the ADA. In addition, when an employee is unable to perform the essential functions of their position even with an accommodation, the employer must now consider whether a leave of absence to permit the employee time to recover is a reasonable accommodation.

This combination is very difficult for employers. The ADA was passed with the intent of removing barriers for individuals with disabilities (such as being blind, deaf or paraplegic) so that they could perform the essential functions of their job. Now, a person who is injured and unable to walk temporarily may be entitled to a leave of absence under the ADA.

But there is hope for employers. Recently, the US Court of Appeals for the Seventh Circuit reaffirmed that the ADA is not a law intended to provide an employee with a leave of absence but assistance to disabled workers so they can work. Severson v Heartland Woodcraft, Inc, 872 F3d 476 (CA 7, 2018).  Granting an extended leave does not enable an employee to perform all of the essential functions of his job, but rather enables the person to avoid performing all of the functions.  An occasional or short term leave may be permitted under the ADA when, for example, an employee needs time off for a flare up of lupus so painful that the employee must stay home. But, “[l]ong-term medical leave is the domain of the FMLA… recognizing that employees will sometimes be unable to perform their job duties….In contrast, ‘the ADA applies only to those who can do the job.’”  Id at 481. Please keep in mind that this is not the rule in our federal circuit. This split in the federal circuits may eventually set the issue up for a ruling by the US Supreme Court.

Contrast that to the MPDCRA.  Because Cook was unable to perform the essential functions of her position during “the relevant time” (even with reasonable accommodation), she did not have a disability under the MPDCRA.  Since 1999, providing a leave of absence, or a “reasonable time to heal”, has not been required under our state law.  Lamoria v Health Care & Retirement Corp, 233 Mich App 560 (1999)

In addition, under the ADA, “accommodations” are only limited by imagination and the employer’s ability to prove an “undue hardship” (which becomes more difficult to prove as the employer’s financial and human resources increase).  However, our state law lists the specific accommodations that are required and, based on the size of the workforce, indicates the amount that must be spent by the employer before it is an undue hardship.

So, what should an employer do?  First, make sure that the employment application gives notice to applicants (and future employees) that requests for accommodations under the MPDCRA must be made in writing within 182 days of the day the need was known (or should have been known).

Second, make sure the employment application contains a 180-day limitations period that is properly worded to avoid being struck as to federal claims which must start with a charge at the EEOC.

Third, seek advice from an experienced employment attorney (such as the author) as disability issues arise.  Whether state or federal law is involved, these are the most complex legal issues faced by employers.  An attorney can advise concerning such things as how to lawfully seek further information about the disability and engage in the interactive process, and how to structure severance payments so that a release of claims will be honored despite the new tender back rule issue. There are differences between the state and federal disability civil rights laws and knowing how to properly navigate the legal mine field with both is key to avoiding liability.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.    

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2018.

United States, Canada and Mexico Reach Agreement on New Trade Pact; Labor Mobility Provisions Are Largely Unchanged

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By: Alexandra LaCombe, Fragomen, Del Rey, Bernsen & Loewy LLP

 

United States, Canada and Mexico Reach Agreement on New Trade Pact; Labor Mobility Provisions Are Largely Unchanged

At a glance

The labor mobility provisions of the United States-Mexico-Canada Agreement are expected to be implemented consistent with existing practices under NAFTA, though each country continues to have the authority to interpret the agreement with respect to the cross-border movement of businesspersons, professionals, intracompany transferees, traders and investors.

 A closer look

Canada, Mexico and the United States have reached agreement on a new trilateral trade pact to replace the North American Free Trade Agreement (NAFTA). The agreement will be known as the United States-Mexico-Canada Agreement, or USMCA.

The labor mobility provisions of the new pact – which ease the cross-border movement of businesspersons, certain professionals, intracompany transferees, traders and investors – are largely the same as those of NAFTA.  Canada’s agreement late on Sunday, September 30, 2018 to join the pact negotiated by Mexico and the United States earlier in September ensured that the mobility system established by NAFTA could continue.

What’s next for the USMCA

The leaders of the three countries are expected to sign the agreement within 60 days.  It must be ratified by the legislatures of the three countries before it can take effect.  Ratification is expected to take place in 2019.

What the revised agreement means for employers and foreign nationals

The three countries are expected to implement the labor mobility provisions of the USMCA consistent with existing practices under NAFTA.  Until the new agreement takes effect, the NAFTA mobility provisions are expected to remain in place without interruption.

This should put to rest the concerns of the U.S. employers that they are in danger of losing their Canadian and Mexican employees who hold the TN visa status.  The TN is a visa category under which citizens of Canada and Mexico have been able to work in the U.S. in certain specific professional categories which primarily require a Bachelor degree.  Many of these categories are in the STEM fields.

Each country maintains the authority to interpret the provisions of the USMCA, and country-specific policies and application procedures related to businesspersons, intracompany transferees, professionals, traders and investors cannot be ruled out.  For example, Canada currently requires intracompany transferees to be currently employed with a foreign subsidiary outside Canada, in addition to having been employed for one year within the previous three years for that entity.  The United States recently announced a pilot program to test new intracompany transferee procedures for certain Canadian applicants and imposed stricter interpretations of the TN Economist category.

If you need assistance with this, or any other immigration issue, please contact the author, Alexandra LaCombe, at (248) 649-5404 or alacombe@fragomen.com. Alexandra is a Member of the Legal Affairs Committee of Detroit SHRM and a partner at Fragomen Worldwide.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. October 2018.

 

SALES COMMISSIONS – A COMMON SOURCE OF TROUBLE

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By: Claudia D. Orr

It seems there are always lawsuits for unpaid commissions.  This one caught my eye because the employer proved several breaches of the agreement, but was not awarded any damages. Let’s look at Waalkes v Resource Communications, Inc, a newly issued unpublished opinion of Michigan Court of Appeals.

In October 2010, Resource Communications, Inc. (RCI) entered an employment contract with Jon Waalkes to work full-time selling its products. Under the agreement, Waalkes would be paid 50% of gross profits on the sales he made. When Waalkes reached a financial goal of $750,000, gross profits, the contract would terminate.

By September, 2015, Waalkes was quickly approaching the goal and gave written notice of his intent to leave the company and to start working in a similar capacity with the same customer and vendor base for his newly formed company Design Create Solve, LLC. The parties began the separation process and determined that $705K gross profit had already been attained and another $30K had been invoiced/ordered and was in process.  There was a discussion about the remaining $15K being offset against amounts that would be paid to Waalkes in commissions.

Instead of entering a written modification of the agreement, RCI sent Waalkes a notice that his plans were in violation of their agreement.  RCI locked Waalkes out of the computer system making it impossible for him to access customer files or issue any further “computerized” purchase orders. Waalkes continued to hand write purchase orders and transmit them to RCI via photos sent via his cell phone. This creative means of transmitting orders resulted in a time sensitive order being mishandled. In October 2015, Waalkes began working for his new company.

Waalkes filed a complaint seeking a court’s declaration of the parties’ rights. RCI (and its owner) filed a counter claim to protect the client base.  The parties agreed that Waalkes eventually sold $751K in gross profits, but RCI argued that Waalkes’ work with it ended prematurely because some of the invoices were still “in process” at the time of his departure and he did not meet the sales goal until February 2016, long after he left RCI. Waalkes asserted that being locked out of the computer system delayed his ability to meet the financial goal sooner, but that he actually eventually exceeded the goal that had been established.

The trial court found that Waalkes, in fact, had breached the employment agreement by engaging in competitive business activities prior to reaching the goal, but also found that RCI was not harmed by the breaches because it had received $750K in sales.  The court, however, enjoined Waalkes from soliciting business from RCI’s customers as prohibited by the employment agreement.

RCI appealed the damages ruling. On appeal, the court found that RCI had received the benefit of its bargain and did not suffer any compensable damages.

This case shows that even if you can prove your employee breached his employment agreement, you may not be entitled to damages unless you can prove you were harmed.  While it may not have changed the outcome of this case, sometimes a liquidated damages clause can be the answer. Commission agreements are tricky to write.

The agreement should address the event that causes the commission to be earned (i.e.,  when the product order is signed by the customer, the product is shipped, the payment is made or perhaps 30 days after payment is received assuming the customer has not returned the order).  The terms of the agreement were not stated in the case discussed above,  but the agreement may have lacked this term because work invoices were still “in progress” at the time Waalkes left the company.

A commission agreement should also reflect how soon after the commission is earned that it is to be paid (i.e., within 30 days, at the end of the following month, at the end of the quarter, 30 days after the fiscal year, etc.). Also, it doesn’t hurt to have the parties expressly disavow any application of the procuring cause doctrine which can be used by the sales person to argue for commissions for the life of the customer or product.

Better yet, if your company is selling goods, consider creating a bonus program instead of paying sales commissions so that you will not be subject to the sales representative statute in Michigan.  This is far safer for the company and allows it to determine whether to pay commissions that become due after termination of employment.  What’s the difference and how do yo do this?  This is one of the topics that will be addressed during DSHRM’s webinar on October 23, 2018 entitled “What’s new and what to do about it”.  Register now to save your “seat”.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. September 2018.