Minimum Wage Increase

By: Karen L. Piper

Michigan’s minimum wage will be increasing on January 1, 2018.  The current minimum wage is $8.90 per hour.  Effective January 1, 2018, it will increase to $9.25 per hour.

Michigan has a lower minimum wage for younger employees.  Employees aged 16 and 17 can be paid 85% of the applicable minimum wage, as long as that wage rate is equal to or greater than the federal minimum wage of $7.25.  (Federal minimum wage is not increasing.)  Effective January 1, 2018, Michigan’s youth minimum wage will increase from $7.57 per hour to $7.86 per hour.

Michigan also has a lower minimum wage for employees who regularly are tipped for their services by customers.  The employees’ average hourly tips as reported by their employer for FICA (Federal Insurance Contribution Act) must equal or exceed the difference between the tipped wage and Michigan’s minimum wage.  As of January 1, 2018, the new rate for tipped employees will increase from $3.38 per hour to $3.52 per hour, as long as their employer reports that tips received average at least $5.73 per hour.

Now is a good time to review employees’ wages to ensure that employees are paid the rate required by law.  Questions regarding the applicable rate can be directed to experienced employment counsel, such as the author.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law. Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com. For further information, go to: http://www.bodmanlaw.com/attorneys/karen-l-piper.

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 are included in the re-post of the article. December 2017.

NLRB’s New General Counsel Targets “Significant Issues” To Rein In Obama Era Rulings

By: Julia Turner Baumhart

Will the Trump administration NLRB reverse such controversial Obama era rulings as the finding of joint employer status based solely on an employer’s potential control over another employer’s employees?  Or invalidating employer handbook rules prohibiting “disrespectful” conduct or requiring confidentiality of workplace investigations?  In issuing the traditional guidelines for submitting significant legal issues for Advice to the new Board, NLRB General Counsel Peter Robb informed NLRB regional directors and other officials on December 1 he intends to do just that, provided the appropriate opportunity arises.

General Counsel Robb, like his predecessors, identified those significant legal issues that should be submitted for legal advice to the Board, to include “cases over the last eight years that overruled precedent and involved one or more dissents,” as well as cases involving issues the Board has not decided.  This means that, in addition to the NLRB’s 2014 holding that handbook rules prohibiting “disrespectful” conduct are unlawful, the General Counsel also targeted controversial 2015 holdings that invalidated no camera/no recording rules and rules prohibiting use of employer trademarks and logos.

Other targeted rulings include the NLRB’s 2014 finding that employees have a presumptive right to use their employer’s email system to engage in Section 7 concerted activities (Purple Communications).  The General Counsel further announced the intent to end existing Advice efforts to extend Purple Communications to other forms of an employer’s electronic communications, including voicemail and instant messaging.

The new General Counsel’s “hit list” also sets its sights on the NLRB’s often maligned 2015 ruling finding joint employer status where one employer has – at most – only indirect or potential control over the working conditions of another employer’s employees.  In a like manner, the General Counsel cancelled an Obama era initiative that advanced the argument that an employer’s misclassification of employees as independent contractors was – in and of itself – a violation of Section 8(a)(1).  Similarly, the General Counsel would like to reduce the scope of the always lurking Weingarten rule, rather than further expand it as the predecessor Board sought to do.  And the General Counsel would like the new Board to reverse the 2015 ruling protecting an employee’s social media postings even where the postings violated EEO principles.

Employers should not expect these and the many other targets announced by the General Counsel to create immediate or automatic changes to existing law, as the Board does not use rule-making to change NLRA law.  To the contrary, the NLRB has to await an appropriate case to come before it to procedurally make changes to existing law.  Should those appropriate cases come to this Board, however, General Counsel Robb has made it plain his office will be ready and able to offer the proper analysis to make those changes a reality.

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.  December 2017. 

Disability Discrimination Is Still A Priority Issue For The EEOC

By: Karen L. Piper

On November 15, 2017, the Equal Employment Opportunity Commission (“EEOC”) issued its Fiscal Year 2017 Annual Performance and Accountability Report.  The report mentioned that the EEOC had launched a new nationwide public portal designed to provide greater public access to its services.  Individuals now can use the portal to locate an EEOC office; inquire about filing a charge; and check on the status of a pending charge.  An individual also can fill out an intake questionnaire through the portal.  This generally is the first step in filing a charge.  It is expected that the convenience and ease of using the portal will increase the number of EEOC charges filed in the future.

The launch of this new portal may reverse the progress made by the EEOC in reducing the backlog of pending EEOC charges.  The 2017 Report announced that the EEOC had made a substantial reduction – 16.2% – in its backlog of pending charges.  As of September 30, 2017, the inventory of pending EEOC charges was 61,621 – the lowest the inventory has been in over 10 years.

Also noteworthy in the report was the dramatic increase in the filing of merits litigation, i.e., lawsuits based on the merits of a discrimination claim.  The EEOC more than doubled the filing of new merits lawsuits in Fiscal Year 2017.  In 2017, the EEOC filed 184 such lawsuits, compared with 86 lawsuits in 2016 and 142 lawsuits in 2015.  It should be noted that 75 of the 2017 lawsuits, or 41%, involved claims of disability discrimination.  Disability discrimination is still a priority issue for the EEOC.

Employers are advised to pay close attention to employee requests for accommodation in 2018 and to consult with experienced employment counsel, such as the author, as needed, to avoid becoming a charge or litigation statistic in the EEOC’s 2018 Annual Report.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law. Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com. For further information, go to: http://www.bodmanlaw.com/attorneys/karen-l-piper.

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 are included in the re-post of the article. November 2017.

Reading the EEOC’s tea leaves: Year-end disability cases reveal priorities

By: Miriam L. Rosen

The EEOC has a fiscal year-end tradition of filing a flurry of cases in September that reflect its key enforcement priorities.  This year was no different. Hitting a five year high, the EEOC filed 86 new lawsuits in September 2017.  The cases reveal clear trends and highlight EEOC priorities.

Reflecting a key priority under its Strategic Enforcement Plan, the EEOC made alleged violations of the American Disabilities Act (“ADA”) a target of its year-end activity.  Over 40% of the new filings – 36 cases – involved ADA violations, including claims alleging failure to engage in the interactive process, failure to provide reasonable accommodations, and maintenance of inflexible leave policies.  So, let’s read the EEOC’s tea leaves to see what insights these new disability discrimination claims can provide employers focused on ADA compliance.

  • In one case, the EEOC alleges that an employer failed to accommodate a security officer who, without any explanation, was removed from her desk job and placed in a foot patrol position. The officer had trouble in the foot patrol position because of a medical condition and asked to return to her seated security position as a reasonable accommodation. The EEOC alleges that the employer violated the ADA when it did not engage in the interactive process, refused the employee’s accommodation request, and ultimately discharged her.
  • In another case involving reasonable accommodations, the EEOC alleges that a hospital failed to transfer an employee with an indefinite lifting restriction to a vacant position.
  • The EEOC alleges in another complaint that a hospitality industry employer terminated an area sales manager after it learned that she had breast cancer and would need time off. The complaint claims that the employer refused to grant leave as a reasonable accommodation; instead, the company fired the employee just one week before she was scheduled to undergo surgery.
  • Zeroing in on its now well-establish priority of combatting inflexible leave policies, the EEOC alleges that another employer violated the ADA by refusing to accommodate a worker recovering from wrist surgery by providing extended leave and terminating her because of her disability.
  • In yet another case, the EEOC asserts that a Hawaiian employer violated the ADA in two ways of particular concern to the agency. The EEOC contends that the employer maintained a rigid maximum leave policy that did not allow disabled employees leaves of absence as a reasonable accommodation beyond the required 12 weeks under the FMLA. In addition, the employer allegedly did not allow employees to return to work if they had any medical restrictions at the end of the FMLA leave period.

It is important to recognize that at this stage the claims noted above are based on the EEOC’s allegations, the employers will defend these claims, and the outcomes of these allegations are uncertain. However, the volume of disability cases is a clear message to employers that a year into a new administration the EEOC is still continuing to focus aggressively on pursuing disability discrimination as an enforcement priority.

Employers can take steps to limit the likelihood of ADA violations by:

  • Ensuring that they are effectively engaging in the interactive process to identify reasonable accommodations and documenting those efforts;
  • Evaluating the need for extended leaves as a reasonable accommodation, rather than maintaining inflexible leave policies; and
  • Eliminating policies that require employees to return to work “100% healed.”

This article was written by Miriam L. Rosen, who is a member 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, 2017.

Proposed Workflex Bill Offers Employers Unique Federal Approach to Paid Leave Time

By: Miriam L. Rosen

As the list of states, counties, and cities that require employers to provide paid leave time continues to grow, the variations in these requirements can pose a hardship for multi-state employers aiming for consistency in their leave practices.  Looking for a way to tame this growing patchwork of leave laws, Representative Mimi Walters (R-Calif.) introduced the Workflex in the 21st Century Act (the “Workflex Act”) in the U.S. House on November 2, 2017.  Walters’ bill would allow employers to voluntarily offer a qualified flexible work arrangement plan under the Employee Retirement Income Security Act (“ERISA”) as an alternative to state and local requirements.

By amending ERISA to treat qualified flexible work arrangement plans as ERISA-covered welfare benefit plans, the bill offers a unique approach to paid leave and flex time that would let employers bypass the various local and state paid leave regulations.  A key aspect of ERISA is that it pre-empts state and local governments’ ability to mandate requirements for any ERISA-covered employee benefit plans.  The Workflex Act harnesses ERISA’s broad preemptive power to allow employers who create paid leave and flex time plans that meet certain requirements to escape state and local paid leave laws. However, the Workflex Act would not pre-empt state and local laws mandating unpaid leave or state temporary disability insurance requirements.

The Workflex Act was developed with the input of various employer organizations, including the Society for Human Resources Management.  Contributing to the development of the ERISA preemption concept was Antoinette Pilzner, a Member of McDonald Hopkins in the firm’s Employee Benefits Practice Group.  According to Ms. Pilzner, “One of the initial concepts underlying ERISA was to enable an employer with employees in multiple locations to establish and administer benefit plans that were subject to a single set of requirements, instead of varying requirements in each location, so that all of its employees could have the same benefits.  Applying that element of ERISA to paid leave programs that meet specified minimum requirements enables an employer to have a uniform paid leave program across its workforce.”

Ms. Pilzner also noted that as an ERISA plan, a qualified flexible work arrangement would provide specific remedies for plan participants and impose specific requirements on sponsoring employers.

The Elements of the Workflex Act

To qualify as an ERISA-covered plan, a Workflex paid leave plan must include two components:

  • A paid leave policy that meets specified standards; and
  • Flexible work arrangements for all employees

Employers who choose to voluntarily participate in this federal option would be required to follow the federal guidelines for both the paid leave and flexible work arrangement components.

  • Paid leave requirements

Under the proposed Act, the amount of paid leave time per plan year is based on an employer’s size and the employee’s length of service as follows:

Employer size Employees with five or more years of service with the employer at the beginning of the plan year would receive: Employees with fewer than five years of service with the employer at the beginning of the plan year would receive:
1,000 or more employees 20 days 16 days
250 to 999 employees 18 days 14 days
50 to 249 employees 15 days 13 days
Fewer than 50 employees 14 days 12 days

The bill provides that full- and part-time employees would accrue paid leave throughout a plan year with such time pro-rated for part-time employees. An employee must be employed for no less than 12 months and for at least 1,000 hours with the employer during the previous 12-month period to be eligible to participate in a qualified plan.

  • Flexible Work Arrangements

The bill also requires employers who participate in a qualified plan to offer at least one of the following flexible work arrangements to each eligible employee:

  • Compressed work schedule
  • Biweekly work program
  • Telecommuting
  • Job sharing
  • Flexible scheduling
  • Predictable scheduling

The biweekly option provides employers with the opportunity to offer a schedule of 80 hours of work over a two week period and would require overtime pay for any hours in excess of each established workweek (e.g., 30 hours in week 1 and 50 in week 2) or for work of more than 80 hours over those two weeks.  This provision would likely require amendment of the Fair Labor Standards Act as well.

With a fall calendar focused on tax reform, it is unclear whether Congress will turn its attention to this legislation before the end of the year.  However, with continued state and local activity putting pressure on employers, paid leave is an issue that certainly will not go away.

This article was written by Miriam L. Rosen, who is a member 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, 2017.

FLSA Overtime Rule – It Ain’t Over Yet!

By:  Claudia D. Orr 

Many thought that when the US District Court in Texas ruled on Aug 31, 2017, that the Department of Labor (DOL) had exceeded its authority when it increased the salary threshold for exempt employees, this would be the end of the story.  But it is not.

On Oct 30, 2017, the Department of Justice, on behalf of the DOL, filed a notice of appeal with the 5th Circuit Court of Appeals challenging the district court’s ruling. While the DOL under the Trump administration is not satisfied with the new threshold set under the Obama administration, it wants to preserve its authority to set that threshold.

According to its press release, the DOL intends to file a motion asking the 5th Circuit to hold its appeal in abeyance while it undertakes further review of the appropriate salary threshold.  Stay tuned!

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  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. November, 2017.

Sixth Circuit: Employer Not Vicariously Liable for Coworker Harassment

By: Karen L. Piper

Employers may be faced with increased reports of sexual harassment by their employees due to recently publicized allegations of sexual harassment against some high profile individuals.  This presents a good opportunity to review the issue of employer liability, as outlined in the Sixth Circuit Court of Appeals recent decision in Hylko v. Hemphill, Case No. 16-2414, unpublished (Oct. 3, 2017).

David Hylko and John Hemphill worked at a U.S. Steel plant in Ecorse, Michigan.  Hemphill trained Hylko.  Both employees reported to the Area Manager, who reported to the Division Manager.  Hylko reported several incidents of sexual harassment by Hemphill to the Area and Division Managers and two Human Resources Managers.  Hemphill admitted that he had engaged in some of the actions Hylko had reported as harassment.  Hemphill was given a verbal warning, a one-week suspension, demoted to Shift Manager and required to take a leadership class.  Hylko accepted a transfer to another area of the plant.  Though they had some contact after that, Hemphill did not harass Hylko again.

A few months later Hylko resigned and sued U.S. Steel for sexual harassment.  Hylko claimed U.S. Steel was liable for Hemphill’s harassment because Hemphill: 1) assigned work to Hylko; 2) made recommendations to their manager about disciplinary action for Hylko; and 3) was referred to by Hemphill, himself, and others as Hylko’s “supervisor.”

The Sixth Circuit reviewed the U.S. Supreme Court’s rulings on employer liability.  An employer is liable for sexual harassment between coworkers, if the employer knew or should have known of the harassment and failed to take appropriate remedial action.  An employer is vicariously liable for a supervisor’s sexual harassment of another employee, even if it did not know and had no reason to know of the harassment.  The reason is a supervisor is “empowered by the employer to take tangible employment actions against the victim.”  Tangible employment actions are those that produce a “significant change” in the “victim’s” employment status, e.g., promotion, demotion, termination.

The Sixth Circuit affirmed dismissal because Hemphill was not Hylko’s supervisor.  The assignment of work, recommendations regarding disciplinary action and “colloquial” use of the title supervisor did not make Hemphill a supervisor.  Hemphill had no authority to effect a significant change in Hylko’s employment.  Since Hemphill was not Hylko’s supervisor, U.S. Steel was not automatically liable for Hemphill’s harassment of Hylko.  U.S. Steel also was not liable for coworker harassment of Hylko.  It had responded promptly to Hylko’s report of harassment and taken appropriate (and effective) remedial action to end the harassment.

The employer was not liable because the alleged “harasser” was not a supervisor and the employer acted promptly on the “victim’s” report.  Questions about whether an alleged harasser is a supervisor or about how to respond to an employee’s report of harassment should be discussed with experienced employment counsel, such as the author.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law. Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com. For further information, go to:  http://www.bodmanlaw.com/attorneys/karen-l-piper.

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 are included in the re-post of the article. October 2017.

Creative Wage Structures Can Be Costly!

By:  Claudia D. Orr 

Employers often look for creative ways to save on payroll.  When I was a very new attorney, I had one client tell me they used the “50 hour rule” for overtime.  I asked what that was and was told overtime was paid after the employee worked 50 hours in a work week.  I asked one of the partners if there was such a rule and he laughed. Just to be clear… there is no such rule.  To this day, I am amazed at how creative employers can be to save a few bucks on payroll, only to have it cost so much more after the lawsuit is filed.  This article is about an employer who learned this very tough lesson after the Sixth Circuit Court of Appeals ruled last week in Stein v hhgregg, Inc.  Let’s look at the compensation plan at issue.

The defendant/employer owns over 25 retail stores in Ohio and well over 200 stores nationwide, selling appliances, furniture and electronics. Its sales employees were compensated on a “draw on commission” basis. If a sales person’s sales were insufficient for the earned commission to satisfy minimum wage, he would receive a “draw” on future commissions to satisfy the requirement.  Of course that draw had to be repaid.

So, if an employee worked 40 hours or less in a workweek, the draw would equal the difference between the amount of commissions actually earned and minimum wage for each hour worked.  If the employee worked overtime, the draw equaled the difference between “an amount set by the Company (at least one and one-half…times the applicable minimum wage) for each hour worked and the amount of commissions [actually] earned.”

Thus, an employee would “receive a draw only if the commissions earned that week [fell] below the minimum wage (in a non-overtime week) or one and one-half times the minimum wage (in an overtime week).”  Generally the draw was deducted from the following week’s commissions, assuming the amount after the deduction satisfied the minimum wage requirement.  If it did not, it would be deducted from the next commission check that was sufficient under this formula.  If an employee received too many draws or ran too great of a draw balance, he could be disciplined or fired.  Upon termination, an employee was required to repay any deficit.

The Sixth Circuit recognized that the US Department of Labor allows draw on commissions pay structures for retail employees, but this one was unique. Generally, the typical draw system has a fixed weekly draw, but this one varied from week to week.  Also, the typical draw amount bears some relationship to the usual amount of commissions that are earned, whereas this one was based on satisfying minimum wage requirements.

First the appellate court noted that the retail exemption did not apply to these employees since their regular rate of pay was not in excess of one and one-half times the minimum hourly rate of pay as required.  “The ‘regular rate of pay’ is defined as the ‘hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed.” Here the employees were only entitled to “exactly” the minimum hourly wage rate during a non-overtime workweek. Thus, the overtime exemption for retail employees did not apply.

Interestingly, the court did not find that the practice of requiring repayment of the draw from future checks to violate the “free and clear” requirement which prohibits an employer from requiring a “kick back” from wages already paid.  Here, the repayment was not from wages that had already been paid, but from future earned commissions.

However, the court found the policy’s requirement of repayment of deficits at termination to violate the FLSA.  While the employer represented to the court that it never did this and has since changed its policy, the fact remained that the employees who were subject to the policy could reasonably believe that they remained liable to the company for the deficits even after their employment terminated. The court found the proper focus to be what the policy states and not how it was implemented. Thus, the “free and clear” requirement was violated because the minimum wage that had been paid was not provided free and clear at time of termination.

There were other problems with the system as well such as approving (even encouraging) work “off the clock” including when there was a mandatory training or meeting to prevent an increase in the requisite amount of the draw caused by the increased work hours.   And, by not compensating the employees for all hours actually worked, the employer also violated the overtime requirements under the FLSA.  The Sixth Circuit remanded the case for further proceedings consistent with its opinion.

This employer was trying to find a creative way to save on payroll but, on remand, may find that the damages (and likely liquidated damages) will far exceed the savings that had been anticipated.  I am occasionally asked by clients about other “creative” compensation plans that simply don’t comply with wage laws. Whenever your company feels creative, run the compensation plan past experienced employment counsel, such as the author, before you implement it and end up facing the costly consequences.

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  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, 2017.

COURT BREAKS WITH FEDERAL LAW IN DECIDING DISABILITY DISCRIMINATION CLAIM UNDER STATE LAW

By: Carol G. Schley, Clark Hill PLC

In many instances, Michigan’s anti-discrimination laws are construed consistently with their federal counterparts.  However, the Michigan Court of Appeals recently interpreted Michigan’s Persons With Disabilities Civil Rights Act (“PWDCRA”) differently that its federal equivalent, the Americans with Disabilities Act (“ADA”), and in a manner beneficial to the employer involved in that case.

In Payment v. Department of Transportation, 2017 WL 3441453 (2017), Mary Payment claimed her employer’s decision to deny her a promotion was based upon her depression and anxiety, and that this action by the employer constituted disability discrimination under the PWDCRA.

The first issue addressed by the court was whether Ms. Payment actually had a “disability,” which it defined as “a determinable mental characteristic of an individual that substantially limits at least one major life activity and is unrelated either to the person’s qualifications for their job or ability to perform their job duties.”  On this issue, the court acknowledged that depression and anxiety can be disabilities under certain circumstances.   However, the court held that based upon the facts presented, Ms. Payment was not disabled because the medication she took for her conditions resulted in her symptoms being “pretty much in remission.”

In considering the mitigating effects of Ms. Payment’s medication in determining whether or not she was disabled, the court followed prior Michigan case law concerning the PWDCRA, and expressly rejected Ms. Payment’s argument that PWDCRA should be interpreted consistently with the ADA, under which mitigating factors are in most instances not considered.  According to the court, “[t]he PWDCRA and the ADA are not identical, and federal laws and regulations are not binding authority on a Michigan court interpreting a Michigan statute.” (citations omitted).

Even though Ms. Payment did not have an actual disability under the PWDCRA, the court held that Ms. Payment could still establish a claim if she could demonstrate she was “regarded” as disabled.  However, the court found that Ms. Payment could not prevail on this theory either because she failed to show that the alleged negative employment action (being passed over for a promotion) was due to her being regarded as disabled.  Instead, the court found that the employer’s decision, even if misguided, was based upon lawful performance metrics.  On this point, the court noted:

[E]mployers are permitted to make foolish, counterproductive, or otherwise generally bad business decisions.  The dubiousness of an employer’s business judgment does not create a question of fact whether an articulated non-discriminatory reason is pretextual.

Finally, the court rejected Ms. Payment’s claim that the employer’s decision to not promote her was unlawful retaliation for her filing of a charge with the EEOC.  The court noted that a “mere temporal coincidence” between a protected activity and an adverse employment action is insufficient to prove retaliation.  While the court noted “some unfairness” in the fact that Ms. Payment was not promoted, “the unfortunate fact is that it is normal to base hiring decisions as much on whether the interviewer happens to like the interviewee as on objective merit, however that merit is evaluated.  Perhaps it should not be so, but that is outside the scope of the PWDCRA or, for that matter, the courts.”

While the employer prevailed in Payment, its holding allowing for consideration of medication and other mitigating factors when determining the existence of a disability was limited to claims brought under Michigan’s PWDCRA.  In many instances, where an employee asserts a claim of disability discrimination, he or she will bring claims not only under PWDCRA, but also the ADA (which applies to employers with 15 or more employees).  Therefore, employers cannot “rest easy” on the Payment case when addressing alleged employee disabilities, and still should proceed with caution and pursuant to the more stringent standards governing the ADA which construes the definition of a “disability” much more broadly and without consideration of most mitigating measures.

When an employee presents issues that may involve a disability, the most important thing for an employer to do is to engage in a meaningful, fact-specific interactive process with the employee.  Given the complexities involved in handling disabilities in the workplace, it is also advisable to consult an employment attorney to help guide the process.

Carol G. Schley is a member of the Detroit SHRM Legal Affairs Committee and an attorney at the law firm Clark Hill PLC.  She can be reached at cschley@clarkhill.com or (248)530-6338. 

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 2017. 

EMPLOYER ESCAPES FMLA LIABILITY BUT STILL LESSONS TO BE LEARNED

By: Carol G. Schley, Clark Hill PLC

            A recent Michigan Court of Appeals case is a reminder to employers that the manner in which they handle an employee’s request for leave could result in unintended consequences, such as extending the statute of limitations for claims under the Family and Medical Leave Act (“FMLA”).

            In Artis v. Department of Corrections, 2017 WL 4015760 (2017), the employee, Michele Artis, worked at a Michigan correctional facility. She began experiencing symptoms of bipolar disorder, and was hospitalized for mental exhaustion and depression on June 28, 2012.  She contacted her supervisor around that date, and claimed she told him she was in the hospital and could not return to work until she received approval from her physician.  Artis did not inform her supervisor how long she would be out of work or in the hospital.  Artis also did not call in to her employer after this initial call.  She also admitted at her deposition that she did not tell her supervisor anything that would lead him to believe she would be absent for more than one day.

            On June 29, 2012, the employer’s human resources officer, unaware of Artis’ call to her supervisor or that Artis was in the hospital, sent Artis a letter stating that she was absent from work without authorization, had failed to report her absences each day in compliance with the employer’s call-in policy, and needed to return to work by July 1, 2012 or else be terminated.  As she failed to return to work by that date, her employment was terminated effective July 1.  The employer later received a fax from the hospital dated July 9, 2012 requesting FMLA leave for Artis and stating she was hospitalized from July 4 to July 9, 2012.

            Artis filed a lawsuit against her employer on July 1, 2015, claiming that it violated its obligation to provide FMLA leave to her, and the fact that she had taken FMLA leave in the past and had informed her supervisor that she was hospitalized triggered a duty for the employer to investigate her claim and realize she was requesting FMLA leave.  She further argued that her claim was not barred by the 2 year statute of limitations because the employer’s violation of the FMLA was “willful,” thus extending the limitations period to 3 years.

            The court acknowledged that FMLA’s statute of limitations is extended to 3 years when an employer’s violation of the act is “willful.”  However, the court found that the circumstances did not rise to the level of willfulness and, therefore, Artis’ FMLA claim was time barred, as she filed her lawsuit after the 2 year statute of limitations had expired.  The court stated that willfulness under the FMLA required more than a showing of “mere negligence,” and instead required a showing that the “employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited” by the FMLA.  The court noted Artis’ admission that she did not inform her employer that she would be out for more than one day as one of the factors negating a finding of willfulness.  Further, the fact that she had previously taken FMLA leave “was insufficient to reasonably put defendants on notice or on constructive notice that her unexplained absence in 2012 was related to FMLA.”

            The employer was able to escape liability in this case only due to Artis filing her lawsuit after the 2 year statute of limitations had run, and this court’s finding that she failed to show the employer acted “willfully.”  However, had this issue not been decided in the employer’s favor, it is possible that the court would have held that there was sufficient evidence for Artis to proceed to trial on her FMLA claim.

            The FMLA puts the burden on the employer to make further inquiry when it is unclear whether an employee is seeking FMLA leave.  In this case, the fact that Artis reported she was in the hospital is a circumstance that should have triggered the employer to make further inquiry.   In addition, it would have been wise for the human resources officer to speak to the supervisor, and possibly follow up with Artis as well, prior to issuing the letter stating Artis would be terminated.  This case is also a reminder to employers to act reasonably and thoroughly when faced with issues that may implicate the FMLA, in order to avoid a finding of “willfulness” that would extend the time period in which the employee can sue.

            This case is also unique in that it was decided by a Michigan state court, as most FMLA claims are filed in federal district court.  Had this case been in federal court, the outcome may have been different, as the federal courts for our jurisdiction tend to be more pro-employee with respect to FMLA issues than our state appellate courts.

            Where the FMLA may be at play, it is best for an employer to act with caution and ensure that the decision maker has all of relevant facts before making a substantive employment decision such as termination.  Further, it is helpful to have legal counsel review any proposed action against an employee who may be protected by the FMLA.

Carol G. Schley is a member of the Detroit SHRM Legal Affairs Committee and an attorney at the law firm Clark Hill PLC.  She can be reached at cschley@clarkhill.com or (248)530-6338.

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, 2017.