Don’t Fall Behind: Address these Employment Law Issues to Finish 2019 Strong

By: Miriam L. Rosen

 

For most, Labor Day marks the unofficial end of summer.  For employers – and particularly their human resource professionals – Labor Day marks the official beginning of the race to complete 2019 projects and plan for 2020.  Here some issues that employers should consider now to avoid falling behind:       

1.  New State Laws.   This year has seen a proliferation of new state employment laws across the country covering issues from anti-harassment, pregnancy rights, pay equity, non-compete restrictions, and paid leave to legalizing recreational marijuana. While some changes took effect during the year, such as the Michigan’s Paid Medical Leave Act, in many states the new requirements will be effective on January 1, 2020.   Whether your organization is located in a single state or is a multi-state employer, now is the time to familiarize yourself with new state laws and determine what changes are necessary to the company’s policies, procedures, agreements, and forms.

2.  Federal Compliance Issues.  This year did not bring any new federal employment laws, but there are plenty of regulatory issues for employers to address.

    • Pay Equity. For employers required to file the EEO-1 form, the September 30th deadline to submit 2017 and 2018 pay data is fast approaching.  The EEOC has also been active in pursuing equal pay issues through litigation under the Equal Pay Act and Title VII.   Year-end compensation reviews present an opportunity for employers to review pay practices and address pay inequities.
    • FLSA Salary Level Changes. Employers should anticipate that the Department of Labor will soon issue its final rule on the salary level for exempt status. Assuming no changes from the proposed rule issued in March 2019, the minimum salary will increase from $455 to $679 per week ($35,308 annually). The new rule is anticipated to take effect in January 2020. Employers should budget for salary adjustments necessary to maintain exempt status or make plans to change classification status if adjustments are not made.
    • Workplace Harassment. The EEOC continues to focus on workplace harassment. For the federal government’s fiscal year ending September 30, 2018, EEOC filings of workplace harassment lawsuits increased by 50% and individual discrimination charges were up by 12%.   With the 2019 fiscal year-end approaching, employers can expect to see that trend continue.   This means that employers must remain vigilant in establishing workplace practices that combat harassment, encourage prompt reporting when incidents occur, and continue to provide regular training.

3.  Training, training, training.   Speaking of training, as you are planning for 2020, employee training must be on the agenda.  Training on employment law issues is critical at all levels of an organization to ensure effective compliance efforts. Training efforts should begin at the time of hire and continue throughout employment.  Training does not have to time-consuming or boring.  Employers should deliver training through various methods to keep employees interested and engaged.  For respectful workplace and harassment training, the EEOC has recommended both in-person training and a scenario based approach.

4.  Crisis management preparation.  Employers have seen their fair share of crises in 2019 from data breaches to workplace violence to measles outbreaks.   Planning ahead is critical to an effective response and to ensure employment law compliance in challenging circumstances.   Employers should think through how various crisis situations may impact their organization and develop contingency plans to address such things as workforce communications when regular channels are down, back up employee information and payroll data if electronic systems are not accessible, and security arrangements for personnel and facilities.

Planning and implementation now will help employers minimize employment law risks in 2020. If you have questions regarding the issues above, you can contact the author or your employment law attorney.

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. September 2019.

DOL Opinion Letter: Rounding Employees’ Time

 

By: Claudia D. Orr

I remember hearing about an older partner bragging that when he was an associate, he knew all of the employment laws by heart, and the young associate saying that’s because there was only one law back then! Alright there were two. The National Labor Relations Act was passed in 1935 and it was followed by the Fair Labor Standards Act (FLSA) in 1938. But still, those were simpler times.

Now there are so many laws, and so many nuisances to those laws that it is difficult for an employer to get it right. But I had to chuckle when I read a recent Department of Labor (“DOL”) opinion letter that was advising on rounding principles for timeclocks.

This employer wrote the DOL asking if its payroll system rounded their employees’ time in a manner permitted under the FLSA. Stay with me here, because this will make you laugh too.

The employer advised that “employees generally clock in and out for each work period using a time clock or computer and the payroll software converts the amount of time an employee records working in each work period into a numerical figure in decimal form extended out to six decimal points (e.g., 7 hours and 30 minutes coverts to 7.500000 hours). The payroll software then totals the converted hours (extended to six decimal points) for each work period on each working day to calculate a numerical figure for daily hours, which is also extended out to six decimal points.

Next, the software rounds that number to two decimal points – if the third decimal is less than .005, the second decimal stays the same (e.g., 6.784999 hours worked rounds down to 6.78 hours); but if the third decimal is .005 or greater, the second decimal rounds up by 0.01 (e.g., 6.865000 hours worked in a day rounds up to 6.87 hours).” FLSA2019-9. Then the software calculates the wages by multiplying the hours worked by the wage rate. Seriously?

This is like the measurement of time used for a photo finish of the Kentucky Derby! Who enters their time by the one millionth of an hour? Do I have this right? [Clients, please don’t get any ideas…]. The employer wanted to know if rounding to the one hundredth of an hour is acceptable. Ok, so apparently the DOL decided to play along…

In relevant part, the DOL responded that “it is common and acceptable for employers to round time in determining an employee’s hours worked provided that doing so ‘will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.’ It has been our policy to accept rounding to the nearest five minutes, one-tenth of an hour [.1], one-quarter of an hour [.25], or one-half hour [.5] as long as the rounding averages out so that the employees are compensated for all the time they actually work.” Id (internal citations omitted). The DOL concluded that because the rounding practice was neutral on its face, the time keeping system was in compliance.

I am not sure if the employer was bragging about its system that tracked time to the one millionth of an hour or seriously confused. And, I can picture the employee at the DOL showing the employer’s letter to coworkers and laughing as he wrote the response.

But I will admit that I learned something. I did not know that an employer could round by a half hour. I have never seen that done. Keep in mind that Michigan requires rounding to the tenth of an hour because its wage and hour agency believes this is “more favorable” to employees. I think we can debate that. An employee would be pretty happy if he only worked 16 minutes and it was rounded up to a half hour. But I digress.

Bottom line, you can keep track of your employees’ work time by the millionth of an hour and round back to the hundredth of an hour and still comply with both the spirit and the intent of the original lawmakers when they passed the FLSA in 1938. Could their time clocks (or sundials) even track time like that back in the 1930s?

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. August 2019.

Sixth Circuit Finds Potential USERRA Violations

 

By: Claudia D. Orr

The Uniformed Services Employment and Re-Employment Rights Act (“USERRA”) has been around since 1994, but there are very few court decisions under this law. So, I was pretty excited to see a published opinion by the US Court of Appeals for the Sixth Circuit and couldn’t wait to read what it had to say about the law. Nearly 25 years after it was enacted, I still have not had a single client ask me any questions about this law. Maybe this will just be knowledge for me to store away in my gray matter.

In Hickle v American Multi-Cinema, Inc (“AMC”), plaintiff Jared Hickle was fired from his job. AMC claims it was for unprofessional behavior and for impeding an investigation. Hickle, who also served in the Ohio Army National Guard, believed it was due to AMC’s anti-military animus, so he filed suit under USERRA and the comparable Ohio law.

The district court in Ohio granted AMC’s motion to dismiss, but the Sixth Circuit reinstated the case. Let’s take a closer look at what happened.

Hickle began his career at AMC in 2004 while he was still in high school. Two years later he received a promotion to Operations Coordinator at the theatre. In 2008, Hickle joined the National Guard. Before he left for training, Hickle interviewed with Tim Kalman (the General Manager) for a management position. When Hickle mentioned that he would need a six month leave of absence for military training, Kalman immediately ended the interview.

Hickle did not receive the promotion, but the person who did thanked him “for joining the military. I just got promoted.” Hickle received a promotion into management following his training and became Kitchen Manager in 2013. During that time, Hickle continued to serve, including a one year tour in Afghanistan.

Senior Manager Jacqueline Adler, Hickle’s immediate supervisor, made several comments over the years about how frustrating his time off was to her and maybe he should be moved to the front of the house where there are more managers to cover for him when he is gone “and it wouldn’t be such a [headache] to her.”

In June 2014, Hickle was supposed to close on the Thursday night before his military obligation on Friday. Closing occurred well after midnight which was when his orders could commence. Thus, Hickle informed Adler he could not close on Thursday. In response Adler commented that he needed to find another job as he no longer met the minimum qualifications at AMC. Hickle told Kalman about Adler’s comment and he said he would take care of it.

After returning from military duty, Hickle asked to meet with Kalman and Adler. During the meeting Hickle provided Kalman with a pamphlet that provided a detailed explanation of an employer’s obligations under USERRA.  Maybe this is the reason none of my clients ever call with questions. After the meeting, Adler continued to make comments suggesting that Hickle could (or should) be fired for taking time off for military service, including in February 2015 when Hickle asked for time off for military duty and she suggested that they needed to replace him.

In April 2015, AMC was expecting huge crowds for “Avengers weekend.” Hickle reminded Adler that he would be gone that weekend for military service. Adler told him that he would be fired if he missed work that weekend. When Hickle reminded her that terminating him for military service would be illegal, she said “that’s okay. We will find something else to terminate you on.” AMC would later argue that Adler was just joking. However, Hickle was fired in April, not long after she made that comment.

Hickle was fired because of the chicken finger incident. No kidding, I am not making this up. Apparently, one of the employees told Hickle that Quinton Branham had asked her to make extra food so he could take it home at the end of the shift. She refused but a “to go” box was found with 10 chicken fingers in it. This exceeded the amount an employee could take home for a shift meal.

Branham admitted that they were his but that they had been abandoned and would have been tossed out. Hickle told the employees that they could not take food home that night but would be permitted to eat their meal at the theater. Well, when finger licking good chicken is at stake, apparently tempers flare. Another employee began cursing at Hickle and acting disrespectful. Hickle wrote a statement concerning the incident and denied losing his temper or otherwise acting unprofessional in return.

The next day, an employee told Hickle that Adler was plotting to get rid of him. According to the employee, Adler was asking an employee to get into an argument with Hickle in front of other employees so they could then write statements against him. While Hickle gathered employee statements about Adler’s plot, AMC was investigating Hickle about the chicken finger incident.

Hickle’s actions were viewed as impeding the investigation. Hickle was fired by Keana Bradley, a “corporate adjudicator” after reviewing findings by AMC’s corporate compliance office which conducted the investigation with input from Kalman.

Under USERRA, employees who perform military service are protected from termination because of their military service. A plaintiff has to show by a preponderance (a tipping of the scales of justice) that his protected status was a “substantial or motivating factor in the adverse employment action.” Then the employer needs to show by a preponderance that it would have taken the same action without considering the military service and for a lawful reason.

The Sixth Circuit found that the district court was wrong when it held that Hickle had not offered any direct evidence of the violation. The decision maker was well aware of Adler’s persistent, discriminatory comments and threats and that Hickle was gathering evidence of Adler’s plot to frame him.

The court, relying on the Supreme Court’s decision in Staub v Proctor Hosp, 562 US 422 (2011), applied the “cat’s paw” theory: “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.”

Hickle presented evidence of Adler’s comments, including that she stated she would find another reason to fire him, and of her plotting to get him fired. Thus, a fact issue existed that needs to be resolved by a jury to determine whether Adler may have influenced the decision.

AMC tried to rely on a case where the investigator was not aware of the plaintiff’s complaints about military leave, and conducted a thorough investigation, terminating the employee solely for lawful reasons. However, the court found the instant case to be distinguishable, stating: “[t]his was not a case in which the decisionmaker was acting on a clean record and in ignorance of lurking discriminatory motives. The decisionmaker was fully aware of the facts suggesting that the ‘impeding the investigation’ charge was pretextual.”

AMC also argued that it had never denied Hickle’s request for time off, which the district court found to be persuasive evidence of a lack of anti-military animus. But the Sixth Circuit said this was not “determinative, as there could be numerous situations in which an employer would grant requests for military leave (albeit grudgingly) for years and nevertheless finally wrongfully terminate an employee for taking such leave.” While granting leave helps AMC’s case, it does not insulate it from liability.

So, in the end, a jury will decide whether AMC relied solely on the chicken finger incident in deciding to fire Hickle and whether it would have reached the same result absent the allegations that he had impeded AMC’s investigation.

I see two lessons from this case.  First, and while recognizing that staffing can become a legitimate concern, I would encourage employers to be supportive of employees who are willing to serve in the military. At the very least, don’t be as blatant in expressing disapproval as Adler was.

Second, if you want to avoid the cat’s paw theory, choose your decision maker carefully and keep that individual completely independent and far away from the opinions and taint of the supervisor who will be accused of discrimination. Such strategy decisions may best be made with the assistance of legal counsel or the cat’s paw may end up without chicken fingers to fall back on.

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. August 2019.

Filing the EEO-1 Survey with Pay Data by Sept. 30

By:  Claudia D. Orr

 

Well, the time has come. Not only do many employers have to file an annual EEO-1, but now those employers must submit compensation data (known as “Component 2” data). Let’s first look at the EEO-1 so we are all on the same page.

The EEO-1 (or the Standard Form 100) must be filed by any employer having 100 or more employees (excluding “state and local governments, public primary and secondary school systems, institutions of higher education, American Indian or Alaska Native tribes and tax-exempt private membership clubs other than labor organizations”) and any employer having fewer than 100 employees if it is owned or affiliated with another company, or there is centralized control, ownership or management such that the entities constitute a single enterprise having 100 or more employees. Single enterprises include those that have “a central control of personnel policies and labor relations.” In addition, many federal contractors that have 50 or more employees must file an EEO-1 annually.

The EEO-1 survey for 2018 was required by May 31, 2019. This form asks about sex and races of employees in different job categories (executive/senior managers, first/mid-level officials and manager, professionals, technicians, sales workers, administrative support, craft workers, operatives, laborers and helpers and service workers). Click here for a sample form: https://www.eeoc.gov/employers/eeo1survey/upload/print-single.txt. There are different forms for single-establishment companies and multi-establishment companies.

The EEO-1 needs to be “certified” as accurate or the employer is in violation. It is interesting that if the person certifying the accuracy of the form willfully makes a false statement, they can be fined and imprisoned for up to five years. However, if an employer simply fails to file the form, and gets caught, the Equal Employment Opportunity Commission’s (“EEOC”) remedy is to petition a federal district court for an order.

The data for the survey is gathered during the “workforce snapshot period” which is a pay period selected by the employer between October 1 and December 31 of the reporting year. The employer only reports data on the EEO-1 for employees who were on the payroll during that snapshot period.

Now, in addition to providing the statistical information above, these same employers need to file Component 2 data by September 30, 2019.  The only exception is that while most federal contractors with 50 or more employees are required to file the EEO-1, federal contractors with fewer than 100 employees will not need to file the compensation data.

Employers are permitted to choose a different “snap shot” pay period for the Component 2 data if they want. The requested compensation data is obtained from the tax form W-2, Box 1. Thus, if an employee was hired at $100K annually, but only earned $50K according to Box 1 because he only worked six months, the employer would report the data in the compensation band that corresponds with $50K. If a corrected W-2 is issued, the employer can use the original or corrected Box 1 data. If the employee starts at one company but then transfers to a different company in the multi-establishment enterprise, the information is only reported for the company where the employee worked during the “snapshot” pay period.

There is also an “hours-worked” matrix for Component 2 data. Each cell in this matrix will correspond to a cell on the summary compensation matrix. For exempt employees, the employer should report accurate hours if time records are maintained. If not, the employer would use 40 hours a week for full time exempt employees and 20 hours for part-time exempt. If an exempt employee works 37.5 hours a week (common at many non-profits), the employer can use that number. “Hours worked” is time actually worked and does not include paid time off for vacation, holidays, etc.

On its website, the EEOC announces that the “web-based portal for the collection of pay and hours worked data for calendar years 2017 and 2018 is now OPEN. The URL for the portal is https://eeoccomp2.norc.org. EEO-1 filers should submit Component 2 data for calendar year 2017, in addition to data for calendar year 2018, by September 30, 2019…” The EEOC’s website has a lot of helpful information including a Frequently Asked Questions page: https://eeoccomp2.norc.org/Faq. There is also a link to a “suggestion box,” but please remember it’s not anonymous.

Critics are concerned about employers’ wage information being obtained by competitors or unions through the Freedom of Information Act (“FOIA”). But the EEOC claims there are exemptions under FOIA that “may” apply and protect the data from disclosure, but I wouldn’t count on it remaining confidential. I guess time will tell.

Adopt and Amend? Supreme Court May Decide Fate of Paid Medical Leave, Improved Workforce Opportunity Acts.

By:  Claudia D. Orr

 

On July 17, I listened to the oral arguments before the Michigan Supreme Court in In re Advisory Opinion on 2018 PA 368 & 369. It was riveting, but I walked away with only a sense of the direction that some of the justices may be leaning in the ruling.

Before we dive in, let’s review what has happened to bring the important issues of Michigan’s Paid Medical Leave and Improved Workforce Opportunity acts before the Supreme Court.

As you may recall, there were two citizen initiatives that were to appear on  the November 2018 ballot which, among other things, would have (1) provided 40 hours of paid sick time to employees who work for smaller employers (having fewer than 10 employees) and 72 hours of paid sick time to employees working for employers with 10 or more employees; and (2) increased the minimum wage rate to $10/hour with additional yearly increases, bringing the minimum wage rate to $12/hour by 2022 and phasing out the tip credit by 2024.

If both initiatives became law by vote of the citizens, the Michigan Legislature could only change them by a three-quarters vote of all members of both chambers of the Legislature, rather than a simple majority vote.

But the citizen initiatives were removed from the ballot when the Legislature adopted both laws.  If that was the end of the story, we would not now have issues to be decided by the Supreme Court. After the November election, the Legislature amended both laws and then Gov. Rick Snyder signed the amended versions into law during the lame duck session. That’s the rub. Can they adopt and then amend in the same session?

The amendments significantly watered down the benefits to employees, making both laws friendlier to employers.  For example, under the amended laws (which became effective March 29, 2019), paid sick time must only be provided by employers with 50 or more employees and then only 40 hours a year.  Similarly, the minimum wage rate was increased to $9.45/hour and it won’t reach $12/hour until 2030. In addition, the tip credit will stay in place.

Democrats in the Legislature asked the state’s new Attorney General Dana Nessel to opine on whether the so called “adopt and amend” process is constitutional under Article 2 § 9 of the Michigan Constitution, which begins by stating: “The people reserve to themselves the power to propose laws and to enact and reject laws, called the initiative, and the power to approve or reject laws enacted by the legislature, called the referendum.”

The Republicans made the same request of the Michigan Supreme Court, believing its conservative majority would provide a more pro-employer opinion. The Supreme Court agreed to hold oral arguments on the issue but did not commit to issuing an advisory opinion. It requested briefs from the attorney general’s office, arguing both for and against the constitutionality of the process that had been utilized by the Legislature and the new laws.

So, July 17 was the hearing which lasted approximately two hours. Therefore, much of what I am conveying now is being paraphrased. However, it does provide a glimpse into what happened.

Remember that the Supreme Court asked the attorney general’s office to brief and argue both sides of the issue. Assistant Attorney General Eric Rustuccia was first up to argue that the process and laws are constitutional. But, before making that argument, he first argued that the Supreme Court did not have the authority to issue an advisory opinion after a law has been given effect. It is clear that a request for such an advisory opinion must be made before the effective date of the law.

However, from the questions that were asked by the justices, it does not appear that the justices were at all convinced that the court had to issue its advisory opinion by any specific date. In fact, Justice Richard Bernstein pivoted from this issue to the substantive issues, asking whether the Legislature’s actions thwarted the will of the people?

The justices asked numerous questions, including whether amendments might further the will of the people while others might thwart it? And, setting aside the content of any specific amendment, couldn’t the process itself thwart the will of the people which reserved for themselves the right to ballot initiatives?

Next, attorney John Bursch argued for those in the Legislature who supported the constitutionality of the two new laws, indicating that the Legislature can amend any law at any time. That “how much of a thwart” should be permitted, a little or a lot, simply cannot be the test. Once the law was adopted by the Legislature, it is a law that can be amended at any time like any other law. He provided a hypothetical wherein the citizens pass a ballot initiative and the Legislature determines that there is not sufficient funding available. Shouldn’t the Legislature have the ability to change it?

The hypothetical was rejected by one of the justices who quickly asked whether anything like that occurred in this case? Justice Bernstein pointed out that the Legislature adopted the initiative as law. Isn’t the integrity of the Legislature, the belief of the people in their government, an issue that should be considered?  Bursch rejected that as the test, arguing that the only test is the text of the constitution and it contains no restriction on the Legislature’s ability to adopt and amend the law.

Next came arguments in opposition to the constitutionality of the process and the two new laws. Michigan Solicitor General Fadwa Hammoud, of the Attorney General’s Office, quoted the opening line from Art. 2 §9: “The people reserved for themselves the power…”  It is clear that the people did not intend to stand by as observers but were to be active participators in our government and Section 9 does not contemplate that the power of the people could be so easily thwarted. She argued that Section 9 was not intended to mean that the people could only propose simple suggestions for the legislature to consider.

If adopt and amend becomes the standard then Section 9 is in effect nullified and the people could never have their voice heard by ballot initiative. She argued that if the Legislature felt that a ballot proposal was harmful, its remedy is to have its own proposal on the ballot.

Chief Justice McCormack focused on the timing of the amendment, asking whether it would have been permissible for the amendment to occur in January, after the close of the 2018 regular session? What if during the same session, the Legislature just amended the law to correct citations in the adopted initiative? Is the issue the timing or the will of the people?

Justice Cavanagh asked if the court finds adopt and amend is not permitted, what would be the remedy? Do the original ballot initiatives stand? The will of the people was to have a state wide vote on the initiatives. So, should the initiatives be made law or should they be put on the ballot for a vote as originally intended?

Two more jurists (Mark Brewer and Samuel Bagenstos) argued that adopt and amend was unconstitutional. Mr. Bagenstos argued that adopt and amend allows the Legislature to kill any legislation that it does not agree with, and any tie on this issue should go to the people since the power was reserved to the people.

Justice Viviano asked if Art. 2 § 9 was put in place because of a mistrust of the legislature, why wouldn’t there have been more protections put in place in the constitution to prevent adopt and amend? Chief Justice McCormick said some amendments may further the will of the people while others could thwart. How should it be determined? Justice Bernstein asked doesn’t this process provide a ready means to thwart the will of the people?

Mr. Restuccia, who had reserved three minutes for rebuttal, had the final word.  He noted that it may be difficult to determine whether an amendment is friendly to the will of the people or not and this should not be the test. The question is whether the Legislature has the power to amend in these circumstances. The constitution is silent on this issue. There is no restriction or prohibition. The remedy is that if the Legislature doesn’t act to further the will of the people, they can be voted out. That is the remedy.

So, is it the process or the change in the law itself that will be the primary issue for the Supreme Court? Maybe it will be both. Were the new Paid Medical Leave Act and minimum wage rate law constitutionally enacted or not? If not, what is the remedy? Do the original initiatives become law or do they get placed on the ballot?

Unfortunately, I can’t provide you with answers to these questions or predict what the Supreme Court will do with any certainty, but I did walk away with the sense that the court was troubled by what had occurred. Hopefully the Supreme Court will issue an advisory opinion. Stay tuned.

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. July 2019.

EEO-1 Pay Data Reporting Resources Update

By:  Miriam L. Rosen, McDonald Hopkins PLC

 

With the 4th of July behind us, employers can now look forward to…filing the EEO-1 Component 2 pay data report.  Okay, maybe that wasn’t what you had in mind for summer fun, but getting the pay data ready for filing should definitely be on your “to do” list.

As you will recall, earlier this year a federal court judge ordered the EEOC to reinstate the Obama EEOC’s EEO-1 pay data reporting requirement and then later rescinded under the Trump Administration.  The court further required the EEOC to collect two years worth of pay data from employers.  To comply with the court’s order, the EEOC announced that it would collect pay data for calendar years 2017 and 2018 by September 30, 2019.

To get employers in the EEO-1 reporting frame of mind, the EEOC recently updated its website with Frequently Asked Questions on Collection of 2017 and 2018 Component 2 Compensation Data. Talk about summer fun!

The FAQs covers a wide array of topics, including how, when, and which employees to count, how to determine reportable compensation data, and where to report the Component 2 pay data in the EEO-1 On-line Filing System.

The FAQs can be found at: https://eeoccomp2.norc.org/faq.html.  This guidance will be a useful resource for employers sorting through two years of pay data.

Another resource available to employers is the EEO-1 Component 2 Help Desk, which is open Monday through Friday 8:00 am to 7:00 pm CST.  The Help Desk contact information is:

  • Email: EEOCcompdata@norc.org
  • Toll Free: (877) 324-6214

With all these resources, you may be wondering when you can actually file the EEO-1 Component 2 report.  The EEOC has recently noted that it is on schedule to open the EEO-1 Component 2 pay data reporting tool on July 15, 2019. System login information will be sent to employers via mail and email on July 15, 2019.

So definitely some summer fun to look forward to!

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. July 2019.

New ADA Case Is Great For Employers

By: Claudia D. Orr

 

Usually I just write about the cases that are bad news for employers because I want to spread a cautionary tale to keep readers out of trouble. But this new case tickled me several times as I read it and I thought why not share some good news for a change.

Booth v Nissan North America, Inc. is a published decision the by the United States Court of Appeals for the Sixth Circuit involving discrimination and failure to accommodate claims brought under the Americans with Disabilities Act (“ADA”). As you know, since the ADA was amended in 2008 it seems nearly every medical issue is a disability under the act. At least we know that would be the position of the Equal Employment Opportunity Commission (“EEOC”)! So when the appellate court found Plaintiff’s work restrictions not to be a disability, I was simply thrilled.

Plaintiff Michael Booth worked at a Nissan factory in Tennessee. In 2004, Booth injured his neck and was placed on several restrictions that prevented him from reaching above his shoulders more than 33% of the time or flexing or extending his neck more than 66% of the time.  However, he could still perform his job and did so for the next ten years.

In 2015, Booth requested another position at the factory, which he was denied because it would have violated his “permanent” work restrictions. That job would not have increased Booth’s benefits or wages, but is viewed as a “preferred” position that Nissan rewards to more senior workers.

Soon after, Nissan decided to restructure the assembly line jobs requiring Booth to not only perform the two tasks he was already doing, but two more. Unfortunately, with the now ten year old restrictions, Booth would have been unable to perform the two extra tasks. While Booth was allowed to temporarily continue working on the line in his original “two-job” position, he was told that Nissan may not have a job for him unless his restrictions changed. Booth was encouraged to see a physician to determine whether he still needed the restrictions.

A physician performed a functional capacity test and modified Booth’s restrictions. The restriction concerning flexing or extending of neck was removed, but he was still limited from reaching above his shoulder more than 33% of the time. In February 2017, Booth was returned to the assembly line where he continued to work throughout the litigation and appeal.

Booth claims he is a person with a disability and that Nissan unlawfully denied him reasonable accommodation. Booth filed an intake questionnaire with the EEOC in November 2016 and a formal charge of discrimination with the Tennessee Human Rights Commission in December 2016. Both charges were dismissed by the EEOC after concluding Booth had failed to present sufficient information to establish a violation of the ADA.

Booth filed a civil lawsuit in the federal District Court for the Middle District of Tennessee which was dismissed when the court granted Nissan’s motion for summary judgment.

The first issue on appeal was whether Booth’s lawsuit was timely filed. The appellate court explained that “the plaintiff must first file a charge describing the alleged discrimination, either with the EEOC or with an equivalent state agency, before he can litigate the claim in court. “If the plaintiff files his charge directly with the EEOC, he must do so within 180 days of the alleged discrimination; if he chooses instead to file the charge with an equivalent state agency, he has 300 days from the alleged discrimination.”

According to Nissan, it informed Booth sometime in November 2015 that his transfer request to the “preferred” job was denied. The appellate court rejected Booth’s argument that the denial was somehow not permanent at that time simply because he continued to ask to speak to higher level supervisors about the decision. “Nissan’s decision was no less final, simply because Nissan supervisors explained the company’s decision to Booth several times in 2015 and 2016. Those discussions did not reset the 300-day deadline to file the charge.” Thus, his charge was not timely since it was brought a year after the decision. An “impotent attempt to renew his earlier request” has no impact on when the limitations period begins. This is a great quote that I intend to use in the future.

Next, the court reviewed Booth’s allegation that he is disabled. Under the ADA, Booth was required to show that (1) he had a physical or mental impairment that substantially limits one or more major life activities, (2) a record of such impairment, or (3) he was “regarded” as having such an impairment.

“Working” is a major life activity, but being unable to perform a discrete task or specific job or simply “having a work restriction does not automatically render one disabled.” The 2008 amendments to the ADA are more favorable to coverage and an impairment that substantially limits one major life activity does not need to limit others in order to be a disability.

However, even after the 2008 amendments, “a plaintiff who alleges a work-related disability ‘is still required to show that [his] impairment limits [his] ability to ‘perform a class of jobs or broad range of jobs’.”  Having a substantial limitation in performing “unique aspects of a single specific job” does not rise to the level of a disability.

Moreover, since Nissan allowed him to continue working on the assembly line while denying him a transfer to the “preferred job,” it clearly did not perceive him as having a substantial impairment that limited his ability to work. Since Booth failed to present evidence of his disability beyond his work restrictions, his discrimination claim based on the refusal to transfer him failed.

Booth also alleged that Nissan failed to accommodate his disability after it modified the assembly line jobs to include two new tasks.  A failure to accommodate claim must be based on “direct” not circumstantial evidence.

To prove his failure to accommodate claim, Booth again had to first show he has a disability, which he cannot as explained above. Setting this aside, Booth remained in his assembly line job (requiring him to perform only the two original tasks) until his restrictions were reviewed by a physician. Those restrictions were modified and he was able to perform the assembly line job as it had evolved. Booth, in fact, had testified that he did not disagree with the modified restrictions.

The court noted that it would have been a closer case if Booth had argued in his brief that Nissan “perceived” him as having a disability when it “warned” him that Nissan might not have a job available for him unless the restrictions were modified, but he failed to make that argument to the appellate court.  Perhaps Booth will next bring a claim against his attorney.

This is an all-around great ADA case.  It makes clear that a charge filed at the EEOC must be brought within 180 days, not 300 days as applicable to charges initiated at the state agency. The court also clearly required “direct” evidence to support a failure to accommodate claim, which is often overlooked. It also reminds us that just because the employee has work restrictions, that does not necessarily mean the employee has a disability that needs to be accommodated under the ADA (although I don’t know that the EEOC’s office in Detroit would agree).  However, before any employer makes that decision, it should consult with 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. July 2019.

Lame Duck Session’s Amendments to Citizen Led Ballot Proposals (for paid sick time and the minimum wage rate) Challenged and May Change!

 By:  Claudia D. Orr

 

I am having flashbacks to when the regulations increasing the minimum threshold for white collar exemptions under the Fair Labor Standards Act were struck by a federal district court in Texas on November 22, 2016. The regulations, which would have required white collar exemption salaries to be no less than $913/week, would have taken place on December 1, 2018, just eight days later!  By then, most employers had already determined which of its exempt employees would need to receive a salary increase and which would be reclassified as non-exempt and eligible for overtime.  Many had already notified the affected workers.

This could have been made worse if the 2016 regulations had already taken effect when they were struck.  Well, that is what may happen to Michigan’s new Paid Medical Leave Act and the Improved Workforce Opportunity Wage Act which are now being challenged by the Michigan Legislature.  Odd, you bet, given that it was the Legislature that just passed both laws at the end of the 2018 Regular Session.

But, with new legislators, come new voices. The issue is whether citizen led ballot initiatives, which would have placed more employee friendly versions before the voters in November, can be adopted by the legislature and amended (to be more employer-friendly) during the same legislative session. As you know, both laws took effect on March 29, 2019.

Why was this process followed last fall by the republican majority legislature? Because had the voters passed the laws, they could only have been amended or repealed by a subsequent vote of the citizens or by a 3/4th vote of the members in both chambers of the legislature.  By adopting the law, and taking it off the November ballot, the legislature amended both laws by a simple majority of the vote and during the same 99th Legislature Session that had adopted the bills just months earlier.  That is the rub. Can they do that?

Democratic State Senator Chang asked the new democratic Attorney General Dana Nessel to weigh in on the issue. To side step that maneuver, Republicans in the Legislature asked the Michigan Supreme Court to review the matter and issue an advisory opinion. The majority of the justices on the Supreme Court are generally viewed as being more conservative, but there have been some who have been swing votes recently.

On April 3, 2019, the Supreme Court issued an order that states it will “consider” whether to issue an advisory opinion. It has invited both chambers of the legislature (and any of its members) to submit briefs on: (1) whether the court should issue an advisory opinion, (2) whether the Legislature was permitted under Article 2, § 9 of the state constitution to “enact an initiative petition into law and then amend that law during the same legislative session,” and (3) whether the two laws were properly enacted. The court also respectfully asked the Attorney General to submit separate briefs arguing both sides of those issues.

Briefs supporting the constitutionality of the enacted legislation are due on May 15 and those arguing against are due on June 19. Amicus curiae briefs by interested parties are permitted by leave of the court only.

For those who are interested in watching oral argument, the hearing will be streamed live on July 17, 2019 at 9:30 a.m. For further information, go to: https://courts.michigan.gov/courts/michigansupremecourt/oral-arguments/live-streaming/pages/live-streaming.aspx Sometimes you can get a sense of which way the justices are leaning by the questions asked. While the Supreme Court has not yet agreed that it will issue an advisory opinion, given the importance of these issues, we may see one as early as August.

So, what could happen? I hate to speculate, but if the laws were not properly amended, the original laws, as adopted by the legislature, may be back in play. That means that minimum wage could jump to $10 hour. Also, the original earned sick leave act applied to small employers having fewer than 10 employees, requiring them to provide not less than 40 hours of paid sick time a year and all other employers to provide not less than 72 hours of paid sick time a year. There are many other pro-employee differences as well.

At least this time around the already implemented changes if struck should not result in lower employee morale since the alternatives would likely be beneficial to workers. Of course, this is all speculation at this point. Stay tuned!

 

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. June 2019.

US Supreme Court Rules that EEOC Charge is not Jurisdictional Requirement for Bringing Civil Rights Claims in Federal Court

Plunkett Cooney

By: Claudia D. Orr

At first, the media’s announcement of the new U.S. Supreme Court decision, Fort Bend County, Texas v Davis,  left me scratching my head, but after reading the case, it really did not say anything new, it just made the point very clear. The opinion authored by Justice Ginsburg was just released on June 3, 2019.

            A little background information may be helpful. Federal courts are courts of limited jurisdiction. They can hear cases involving a federal question or they can hear cases where there is diversity (in very simple terms, all of the defendant are located out of the state where the claims are brought) and there is $75,000 or more at issue. Federal civil rights claims (i.e., those under Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, etc.) present federal questions. If the court does not have jurisdiction, it cannot exercise authority over the case.

            Title VII contains a procedure that applies to most of the federal civil rights statutes whereby charges must first be filed with the Equal Employment Opportunity Commission (EEOC) within 180 days of the alleged unlawful practice (or within 300 days in states, such as Michigan, where there is a state agency empowered to investigate civil rights violations). If the EEOC determines there is “no reasonable cause to believe that the charge is true”, it issues to the “charging party” a notice of right to sue in court.

But what happens when the charging party files in court without first filing the administrative charge, or before the notice of right to sue is issued, or perhaps fails to allege all of the violations in the charge that are stated in the civil action? Must the federal district court dismiss those civil rights claims upon motion by the defendant/employer? If filing at the EEOC is a jurisdictional requirement, the answer is yes. Let’s look at some of the prior Supreme Court decisions on this issue.

            In 1982, the Supreme Court held that the administrative process applicable to federal civil rights claims is not a jurisdictional prerequisite to suit, but rather “a requirement that, like a statute of limitations, is subject to waiver, estoppel, and equitable tolling.” Zipes v Trans World Airlines, 455 US 385, 393 (1982).

However, just two years later, the Court felt obliged to clarify its prior statement, stating, “[p]rocedural requirements established by Congress for gaining access to the federal courts are not to be disregarded by courts out of a vague sympathy for particular litigants. … [I]n the long run, experience teaches that strict adherence to the procedural requirements specified by the legislature is the best guarantee of evenhanded administration of the law.”  Baldwin County Welcome Center v Brown, 466 US 147, 152 (1984). The Court further clarified that it had not declared in Zipes that the requirement does not ever have to be satisfied; but only that it is subject to waiver and tolling, etc.

            In the recent case, the former employee had filed a charge at the EEOC alleging sexual harassment and retaliation. Later, she “amended” her charge (or thought she had) by writing on the intake questionnaire “religion”, “discharge” and “reasonable accommodation”.  Apparently, after the initial charge was filed, she was fired for failing to report to work on a Sunday due to a church commitment when she had been told she would be fired if she did not report. A point of fact: writing comments on the intake questionnaire is not how charges are amended.

            After receiving her notice of right to sue, the former employee brought a lawsuit that contained a claim of religion based discrimination. “Years into the litigation, Fort Bend asserted for the first time that the District Court lacked jurisdiction to adjudicate [the] religion-based discrimination claim because she had not stated such a claim in her EEOC Charge.” The district court granted the motion finding the requirement to be jurisdictional. The Fifth Circuit reversed holding that this was not a jurisdictional requirement, but rather the “requirement is a prudential prerequisite” to filing suit.

The Supreme Court agreed to hear the case to decide the issue once and for all. The issue was framed as follows: “whether a precondition to suit is a mandatory claim-processing rule subject to forfeiture, or a jurisdictional prescription.” The Court explained that jurisdictional requirements can’t be waived and, in fact, a court may raise the issue sua sponte (on its own) at any time. If a court does not have jurisdiction, it lacks authority to act in the case.

The Court characterized the charge filing requirement as “a processing rule, albeit a mandatory one, not a jurisdictional prescription delineating the adjudicatory authority of courts.” “[A] rule may be mandatory without being jurisdictional, and Title VII’s charge-filing requirement fits that bill.”

So, there you have it. Employers should continue to raise the defense as early on in litigation, but a Plaintiff may be able to argue that there are reasons why the failure should be excused. Dismissal on this basis is not a certainty.

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. June 2019.

Causal Connection between Protected Activity and Adverse Action Supported By Good Deed

By:  Claudia D. Orr

My clients know what I am going to say when they want to “bend the rules” to do something nice for one of their employees: “No good deed goes unpunished.” This is just one issue that caused the employer trouble in Redlin v Grosse Pointe Public School System, a recent decision published by the U.S. Court of Appeals for the Sixth Circuit. Let’s look at what happened.

In September 2012, plaintiff Debra Redlin was hired as an Assistant Principal at the Grosse Pointe South High School. She and another Assistant Principal, Terry Flint, reported to Deputy Superintendent Jon Dean. In the summer of 2014, Moussa Hamka became the principal at the high school.

In 2014, Dean told Flint that he intended to conduct a “spot-check” on a social worker who was suspected of being intoxicated at work. Dean told Flint to keep it confidential, but Flint apparently warned the social worker. When Flint confessed, a letter of concern was placed in his personnel file.

In December 2014, Vice Principal Flint made statements to plaintiff about the media specialist’s evaluation that suggested he was going to try “to nail” the employee on his evaluation. Plaintiff warned the employee. That employee discussed the issue with Principal Hamka who told plaintiff she would be disciplined for disclosing the confidential information.

Plaintiff complained to Dean about the Principal Hamka’s comments and threat. Dean interpreted plaintiff’s complaint to be about sex discrimination and harassment. The complaint was resolved informally and both plaintiff and the principal committed to working together.

Following the resolution of plaintiff’s complaint, Dean met with Plaintiff to discuss her inappropriate disclosure of Flint’s evaluation of the media specialist and what her discipline would be for making the disclosure. Dean told her that he would hold plaintiff’s discipline in “abeyance” through the end of the school year since he knew she was looking for administrative positions in other school districts.

There it is; a good deed. Dean was trying not to tarnish plaintiff’s work record while she sought other jobs. Of course what follows the good is the punishment: Plaintiff testified that she interpreted this as a threat — that Dean wanted her gone and that if she did not leave the school district by the end of the school year, she would be disciplined.

In June 2015, Gary Niehaus became the new district’s superintendent. He decided to transfer plaintiff to a middle school because she had warned the employee about the performance review and “because of her gender complaint” against Hamka.  Good grief.  Seriously?  Wasn’t there anyone to advise him this was a really, really bad reason for the decision?  I know the school district’s attorney and I bet he about fell over with that testimony. While for two years plaintiff received the reduced wage rate paid to assistant principals at middle schools, Niehaus testified that this had been a mistake and he eventually paid her the difference in back pay.

I am going to skip a lot of the facts but in November 2015 plaintiff took a leave under the Family and Medical Leave Act (FMLA) for stress, filed a discrimination charge in December 2015 alleging sex discrimination and retaliation and, after she got a right to sue letter from the EEOC, plaintiff filed suit in the U.S. District Court for the Eastern District of Michigan. Plaintiff alleged, among other things, sex discrimination and retaliation for complaining about sex discrimination and for taking a FMLA leave. The court granted the school district’s motion for summary judgment and plaintiff appealed.

In short, the appellate court found plaintiff and Flint to be similarly situated and that, while both plaintiff and Flint disclosed confidential information, only Flint received a simple “letter of concern” which did not affect his performance review. By comparison, plaintiff received a “minimally effective” rating on her performance review which resulted in a contract limited to one year, no merit pay or increase and a performance improvement plan which carries with it a threat of termination.

It also found that the transfer to a middle school also satisfied the adverse action requirement for her sex discrimination and retaliation claims under Title VII and state civil rights law even though, in the end, she did not suffer a wage cut.  Her transfer outwardly appeared to be not only a loss of prestige but also a loss of salary.  The minimally effective rating on her performance review also had consequences.

Moreover, it was suggested to plaintiff that she should leave (Dean told plaintiff “he didn’t see [her] [belonging at the High School]”  and told her she would only be disciplined if she didn’t find another job before the end of the year) and Niehaus admitted transferring plaintiff, in part, because of the “gender complaint”.  These are not good facts.

There is a lot of analysis by the appellate court concerning the wrongdoing by plaintiff compared to Flint, the different decision makers involved in disciplining the two employees, the proximity in time between the sex discrimination complaint and adverse action, etc.  However, in the end, the discrimination and retaliation claims under the civil rights laws were reinstated.

This case demonstrates several things.  First, as I said above, no good deed goes unpunished.  Second, before taking action against an employee who has complained of discrimination (or in this case because the employee complained), it’s wise to seek legal advice.  And, third, just because an employee is not fired, that doesn’t mean the employer is not at risk for serious civil claims. Consulting with an employment attorney along the way may have saved the school system a lot of trouble, and expense.

 

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. May 2019.