Misclassifying Employees as Independent Contractors… A Costly Mistake

Troy, MI, March 17, 2014:  QuadWest Associates, LLC is presenting an informative session on how to determine whether a worker is an independent contractor or employee. Getting the classification correct is critical for tax, wage, unemployment, workers’ compensation and other employment issues. Getting it wrong, can be a costly mistake for an employer!

QuadWest President, Susan West, SPHR and Integrated Financial Group Co-Founder, Christopher Picciurro, are hosting this evening event targeted for small business owners and companies who utilize both direct employee and independent contractors. Participants will walk away with the basic tools for knowing:

  • Recent Claims
  • Liabilities for Misclassification
  • Three Categories of Consideration for Contractor Determination
  • Top 10 Tips for Classifying Properly

Join us for this timely and free one-hour mini seminar to be held Tuesday, March 25, 2014, starting 5:30 pm at the Sterling Heights Chamber of Commerce, 12900 Hall Rd., Suite 200, Sterling Heights, MI 48313. Those interested in attending can contact Helene Lewis at (248) 736-0489 or helenel@quadwest.com for more information.

Founded in 2004, QuadWest is a management consulting firm with a passion for uplifting Human Resource functions within small to mid-size companies.  Our team of professionally-trained HR Business Partners will support your company’s success by providing strategically-focused, practical Human Resource Management guidance. We specialize in business driven HR consulting services, onsite and offsite, in the areas of: HR Operations set up, Employee Relations, Training, Performance Management, Compliance/Risk Management, Leadership Development/Coaching, Recruiting and Workplace Investigations. Our success stems directly from our commitment to providing clients with the HR services that meet their needs with the breadth and depth of our HR expertise found in our talented team.

About QuadWest (www.quadwest.com)

FEDERAL CIRCUIT COURT UPHOLDS EEOC’S POSITION – TEMPORARY INJURY MAY BE DISABILITY UNDER ADAAA

By: Claudia D. Orr

In an apparent case of first impression for any federal appellate court, the Fourth Circuit Court of Appeals sides with the Equal Employment Opportunity Commission, holding that a temporary injury may be a disability under the Americans with Disabilities Act Amendments Act (ADAAA).  Summers v Altarum Institute Corporation.[1]

In 2011, Carl Summers fell and injured himself while exiting a commuter train. He was transported to a hospital where doctors determined that he had fractured his left leg and tore a tendon in his left knee.  Summers endured two surgeries and was unable to walk normally for seven months.

The Fourth Circuit’s analysis focused on whether Summers’ temporary injuries were a disability under the ADA as amended in 2008. Granting dismissal to the employer, the district court had relied on a 2002 Supreme Court decision which suggested that a temporary injury could not qualify under the ADA.  Toyota Motor Manuf, Ky, Inc v Williams. In reversing the district court, the Fourth Circuit noted that, in 2008, Congress amended the ADA, in part, to overrule this decision. Since then, the EEOC had promulgated regulations interpreting the amendments. Of particular relevance, the court focused on an EEOC regulation that states:

“[E]ffects of an impairment lasting or expected to last fewer than six months can be substantially limiting” for purposes of proving an actual disability.

29 CFR 1630.2(j)(1)(ix). The EEOC provides the example that “if an individual has a back impairment that results in a 20-pound lifting restriction that lasts for several months, he is substantially limited in the major life activity of lifting, and therefore covered under the first prong of the definition of disability.” 29 CFR 1630.2(j)(1)(ix)(app).

The employer argued that “Congress’s intent ‘not to extend ADA coverage to those with temporary impairments expected to fully heal is evident,’ because such a ‘dramatic expansion of the ADA would have been accompanied by some pertinent statement of Congressional intent.”’ The court disagreed, stating that the consequences would be less “dramatic” than envisioned. “Prohibiting employers from discriminating against temporarily disabled employees will burden employers only as long as the disability endures.  Temporary disabilities require only temporary accommodations.”

The court reasoned that while the 2008 amendment to the ADA “imposes a six-month requirement with respect to ‘regarded-as’ disabilities, it imposes no such durational requirement for ‘actual’ disabilities, thus suggesting that no such requirement was intended.”

Employers likely disagree with the court’s analysis concerning the lack of “dramatic” consequences caused by a requirement under the ADA to accommodate employees with temporary injuries. This interpretation requires employers to consider, for example, whether a leave of absence should be granted to an employee during their first year of employment when Family and Medical Leave Act (FMLA) is unavailable, or to an employee who has exhausted FMLA leave. This interpretation also burdens employers with providing an accommodation unless they can prove it would cause an undue hardship, which is not an easy burden.

If you need assistance with the ADAAA or any other employment issue, you should seek the assistance of an attorney who specializes in employment law.

This article was written by Claudia D. Orr, a member of the Legal Affairs Committee. Claudia is an experienced employment attorney at Plunkett Cooney and can be reached at corr@plunkettcooney.com or 313-983-4863.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. February 2014.


[1] The Fourth Circuit hears appeals from federal district courts in West Virginia, Virginia, Maryland, North Carolina and South Carolina.  The Sixth Circuit, which includes Michigan, is not bound by this decision, but may find it persuasive.

Comments Are Not Rendered Harmless Because They Are Motivated By Compassion For Pregnant Employee And Unborn Child

By:  Claudia D. Orr

Case after case reflects the truth behind this title.  An employer reassigns a pregnant employee because it is concerned about her health, and the discrimination case eventually follows. No good deed goes unpunished. Let’s review Latowski v North Woods Nursing Center to see how the pregnancy discrimination claim arose.

In 2007, Latowski was employed by North Woods as a certified nursing assistant (“CNA”). In this position, she assisted nursing home residents with daily living activities such as dressing, showering, eating, and moving about. A year later, she became pregnant. Pursuant to North Woods’ policy requiring employees to produce a doctor’s note when there was “anything medical”, Latowski provided a note indicating she had no restrictions. However, on October 1, 2008, a few months into her pregnancy, her doctor faxed in a note indicating Latowski had a 50 pound lifting restriction. Judy Doyle, Director of Health Care Services, advised Latowski she could not work with the restriction because North Woods only accommodates work related injuries and it did not want to be liable if something happened to her baby. However, she encouraged Latowski to have her doctor lift the restriction. Latowski said he would not, given her history of miscarriages.

When Latowski reported to work the following day, she was told she had “resigned” and she was escorted out.  Possibly after receiving some legal advice, Doyle contacted Latowski approximately two weeks later and offered her leave under the Family and Medical Leave Act. Latowski, however, refused leave since it was only her second trimester and she would run out of leave time before giving birth. Thus, Doyle sent Latowski a letter accepting her resignation effective October 17, restating that North Woods does not accommodate non-work related restrictions.

Latowski filed an EEOC charge and eventually a civil lawsuit alleging, among other things, claims under the federal Pregnancy Discrimination Act, Title VII and Michigan’s Elliott-Larsen Civil Rights Act. The Eastern District of Michigan judge granted the employer’s motion to dismiss, reasoning that North Woods’ policy of not accommodating non-work related restrictions was “pregnancy blind” and there was no evidence of an unlawful animus.

The Sixth Circuit reversed.  Under Title VII, discrimination “on the basis of sex” includes pregnancy and related medical conditions and it prohibits treating such individuals different from persons not pregnant but who have the same “ability or inability to work.”  Since Latowski produced evidence of light duty being provided to individuals with work related injuries who had similar lifting restrictions, she established a prima facie case of pregnancy discrimination.

In response, North Woods argued that it had an economic based justification for its policy. However, the 6th Circuit found that “[a] reasonable jury could easily conclude that North Woods’ business decision – to implement a policy terminating otherwise qualified workers whose doctors imposed any restrictions arising from non-workplace injuries, even if those restrictions do not limit the employees’ ability to competently perform their jobs – is so lacking in merit as to be a pretext for discrimination.”

The court also referenced statements made by Doyle, a co-owner and a manager suggesting an unlawful animus, including:

  • You “wouldn’t want to lose your baby”
  • North Woods “would be liable if something happened to her baby and we had allowed her to work against her doctor’s advice”
  • That a CNA may be required to lift patients weighing more than 150 pounds “which could have exceeded [her] safe lifting capacity and jeopardized her health or that of her unborn child”
  • That her “belly would be in the way”
  • That the policy was motivated by the desire to “know that the employee is able to work safe for her and her child”

The 6th Cir found these statements made by management directly related to the termination decision. The court noted that the “comments are not rendered harmless because they were motivated by compassion or concern for Latowski and her unborn child’s health.” Thus, the court found sufficient evidence to withstand the motion to dismiss and reversed and remanded the case.  The court found the analysis to be the same under the state Elliott-Larsen Civil Rights Act.

What is inexplicable is that the court did not distinguish, or cite, Reeves v Swift Transportation Company, a 6th Circuit opinion from 2006 which held just the opposite.  There, the court reasoned that to provide a pregnant woman with light duty when the employer does not provide it to all others who have non-work related limitations was to afford preferential treatment to pregnant women.

Regardless, the Elliott-Larsen Civil Rights Act was amended in 2009 to prohibit an employer from treating “an individual affected by pregnancy, childbirth, or a related medical condition differently for any employment–related purpose from another individual who is not so affected but similar in ability or inability to work, without regard to the source of any condition affecting the other individual’s ability or inability to work” (emphasis added). It is generally believed that the italicized words would prohibit under state law the granting light duty to employees with work related injuries while denying it to pregnant women.

This case not only underscores the importance of training managers concerning employment laws applicable to their workplace, but also of seeking legal advice at the time employment decisions are being made.  Employment laws are complicated and require careful analysis to avoid liability.  If you have any employment issues that require legal advice, consult with an experienced employment attorney.

This article was written by Claudia D. Orr, a member of the Legal Affairs Committee. Claudia is an experienced employment attorney at Plunkett Cooney and can be reached at corr@plunkettcooney.com or 313-983-4863.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. February 2014.

Sixth Circuit Determines Essential Functions Under ADA and Reinstates Lawsuit

By:  Claudia D. Orr

After the Eastern District of Michigan dismissed claims under the Americans with Disabilities Act (ADA), the Sixth Circuit found fault with its analysis of “essential functions” of the position and reinstated the case.  Because this issue is seldom the focus of analysis, let’s examine Henschel v Clare County Road Commission.

In 2007, Henschel became employed by the road commission and, shortly thereafter, he became an excavator operator.  An excavator is a heavy piece of equipment used to dig trenches.  Approximately 70% of the time, the excavator is responsible for driving a semi and hauling the equipment to the work site.  The other 30% of the time, a semi-truck driver hauls the equipment. The terms of Henschel’s employment were governed by a collective bargaining agreement.

In 2009, Henschel was involved in a motorcycle accident which resulted in the loss of a leg from the knee down and being fitted with a prosthetic. While he was out, the road commission hired a temporary worker to fill in. When Henschel returned to work, he was granted a medical waiver by the Michigan Traffic Safety Division which allowed him to maintain his commercial driver’s license but restricted him to operating automatic transmission vehicles. When none of the drivers assigned to the automatic transmission semi-trucks agreed to give up their truck for Henschel, his employment terminated.

Henschel filed a charge of discrimination with the Equal Employment Opportunity Commission which found cause.  Henschel then filed a civil lawsuit which was dismissed by the granting of defendant’s motion.  The district court found, in relevant part, that transporting the excavator was an essential function of the position and, since Henschel was unable to perform this task, he was not qualified for the position. The Sixth Circuit Court of Appeals disagreed and reinstated and remanded the case.

The 6th Circuit first noted that the issue of essential functions is typically a question of fact and therefore not suitable for resolution by motion. In determining what is an essential function, courts should consider several factors, including: “(i) The employer’s judgment as to which functions are essential; (ii) Written job descriptions prepared before advertising or interviewing applicants for the job; (iii) The amount of time spent on the job performing the function; (iv) The consequences of not requiring the incumbent to perform the function; (v) The terms of a collective bargaining agreement; (vi) The experience of past incumbents in the job; and/or (vii) The current work experience of incumbents in similar jobs.” 29 CFR §1630.2(n)(3).

“Essential functions are those that are fundamental to a particular position, not marginal functions.”  The road commission’s opinion that this duty is essential is only one factor to consider. Here, the job description of the semi-drivers included hauling heavy equipment whereas this job is only assigned to the excavators under the catch all of “other duties assigned.”  While the excavators actually haul the equipment themselves approximately 70% of the time, this function actually takes up only a small amount of the excavators’ time since the equipment is sometimes at the same job site for weeks. Moreover, evidence supported the inference that there would only be “minimal consequences to [the road commissions operations] if the excavator operator no longer hauled the excavator.”  There was also testimony that the semi-truck driver could haul the excavator for Henschel without any problem and a number of other employees could do so when the semi-driver was not available. Hauling the excavator “entailed a marginal time investment” and other road commission “employees were qualified and capable of doing the hauling”.  Thus, the 6th Circuit found an issue of fact existed concerning whether the hauling of the excavator was an essential function and remanded the case.

This case not only underscores the importance of well drafted job descriptions, but also of legal advice at the time decisions are being made under the ADA.  The ADA is a complicated law that requires careful analysis to avoid liability.  If you have any ADA issues, have them addressed by an experienced employment attorney.

This article was written by Claudia D. Orr, a member of the Legal Affairs Committee. Claudia is an experienced employment attorney at Plunkett Cooney and can be reached at corr@plunkettcooney.com or 313-983-4863.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. January 2014.

Blind Reliance On Pre-Employment Physical Resulted In ADA Violation

By:  Claudia D. Orr

A school district not only had its motion for Summary Judgment denied, it had Summary Judgment granted against it in an Americans with Disabilities Act (“ADA”) case by a judge on the Eastern District of Michigan bench. Because this result is highly unusual, let’s look at LaFata v Dearborn Heights School District to see how the School District’s decision to withdraw a job offer went wrong so that you don’t make the same mistake.

At the time Plaintiff LaFata applied for the position of Plant Engineer with the School District, he had been working as a building supervisor at the Lincoln Park Community Center for ten years. In the building supervisor position, LaFata was responsible for the complete maintenance of the Community Center, both inside and out, including the heating, air conditioning, plumbing, electrical, roof repairs, refrigeration of the ice rink, pool maintenance, etc. Significantly, in his position, LaFata regularly climbed ladders and carried in excess of forty pounds.

After his second interview, the School District extended an offer of employment contingent upon the drug screen, pre-employment physical and background check. During LaFata’s physical, the doctor at Midwest Health Systems noticed that he had some difficulty climbing up on the examination table. The doctor also noted some muscle atrophy in LaFata’s legs and that he was unable to walk on his heels or toes.

After further examination, the doctor concluded that LaFata had Charcot Marie Tooth syndrome which causes muscle deterioration and a loss of strength over time. The doctor provided LaFata with a note to be taken to his family doctor. The family doctor agreed with the diagnosis but indicated that LaFata’s strength was sufficient to perform daily activities and she concluded that LaFata was “suitable” for the job at issue.

At some point, the Midwest doctor informed the School District that LaFata should only perform ground level work and be restricted from climbing ladders (because he may not be able to dorsi-flex his foot up or down while maneuvering the ladder) and lifting more than forty pounds. The record was not clear whether the doctor felt these restrictions were necessary presently, or in the future. However, based on the information provided by Midwest, the School District withdrew the job offer indicating that the “doctor determined that you would only be able to work with some major restrictions.  Considering the type of position that you are seeking, it is not possible for us to employ you with restrictions that indicate you can only work at ground level and cannot lift anything over 40 pounds.”

LaFata filed a lawsuit claiming, among other things, that the School District violated the ADA in withdrawing the job offer. Both the School District and LaFata filed motions seeking judgment as a matter of law. During the hearing, the School District argued, for the first time, that LaFata did not have a disability under the ADA. The judge rejected this argument because it was first raised at oral argument and because the School District undoubtedly regarded LaFata as disabled as it withdrew the job offer.[1]

The court noted that the ADA requires “an individualized inquiry in determining whether an employee’s disability or other condition disqualifies him from a particular position” Here, the Midwest physician’s examination “was neither thorough nor comprehensive” and the School District failed in its duty to “assure itself that his examination and analysis were thorough and/or reasonable.”  The court found it significant that the opinion did not come from a treating physician and that the examination was cursory.

The court stated that the inquiry by the School District should have been whether the candidate could perform the essential functions of the position with or without a reasonable accommodation and no analysis of accommodation was ever made. The School District had an obligation to engage in an interactive process with LaFata to determine if there was a reasonable accommodation that would allow him to fulfill the duties of the job.

Thus, not only did the judge deny the School District’s motion, it granted LaFata’s motion for judgment and set the case for trial on damages only.

What is the take away?  First, before withdrawing a job offer based on notice of restrictions from the clinic, the employer should consider the following additional steps: (1) inquire about the scope of the examination, (2) allow the applicant to provide clarification from the treating physician, (3) provide the applicant with the opportunity to demonstrate their ability if they so choose, and (4) engage in the interactive process concerning reasonable accommodations.

More importantly, employers should seek legal counsel from an experienced employment attorney when ADA issues arise. This is a complex law that is laden with nuances that can result in significant liability.

This article was written by Claudia D. Orr, a member of the Legal Affairs Committee. Claudia is an experienced employment attorney at Plunkett Cooney and can be reached at corr@plunkettcooney.com or 313-983-4863.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. January 2014.


[1] Since the 2008 amendment, the ADA has included within the definition of “disabled” being subjected to an action “because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”

Religious Accommodation Is An EEOC Hot Button Issue

By: Karen L. Piper

Title VII prohibits discrimination, harassment and retaliation because of an employees’ religion.  Title VII also requires an employer to accommodate an employee’s religious beliefs and practices when there is a conflict between the employee’s religious belief and a job requirement.

An employer satisfies its duty to accommodate by offering a reasonable accommodation or by showing accommodation would cause undue hardship. Undue hardship, for religious accommodation purposes, only requires showing more than a de minimis burden in terms of cost or administrative burden on the employer or impact on the rights and benefits of other employees.

In 2013, the Equal Employment Opportunity Commission (EEOC) filed 33% more religious discrimination lawsuits than it filed in 2012.  During the same time period, between November and December 2013, the EEOC announced on its web site that it had reached settlements in five lawsuits it had filed alleging failure to accommodate either an employee’s or applicant’s religious beliefs and practices.

In each of the five EEOC settlements, employers paid money to settle the employee’s or an applicant’s claims.  Four of the five cases involved claims of conflict between an employee’s religious beliefs and the employer’s dress code.  For example, a fast food franchise paid a female employee $40,000 for refusing her request to wear a skirt to work, as required by her religion, rather than uniform pants.  A car dealership paid $50,000 to settle a case filed by a qualified applicant who would not shave his beard due to religious reasons.  The fifth settlement of $70,000 was paid by a global shipping company which declined an employee’s request for time off to attend an annual religious service.

As EEOC has increased its enforcement activity of religious discrimination and accommodation claims, now would be an opportune time for employers to: i) review their EEO policies to include information on how an employee should request a religious accommodation; and ii) remind supervisors to consult Human Resources whenever an employee indicates religious reasons for seeking a change in job requirements, such as modification of the dress code or time off for religious reasons.  Experienced employment counsel can provide assistance on both of these issues.

 This article was written by Karen L. Piper who is the Chair of the Legal Affairs Committee of Detroit SHRM and a Member of the law firm of Bodman PLC located in its Troy MI office.  She can be reached at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee. January 2014.  

 

 

 

 

 

 

 

 

 

Court Permits Employer to Enforce No-Fault Attendance Policy Against Employee Claiming FMLA Leave

By: Carol G. Schley, Clark Hill PLC

In a recent decision by the federal Sixth Circuit Court of Appeals (which includes Michigan), the court determined that an employer could lawfully enforce its no fault attendance policy against an employee, despite the fact that the employee was absent for an FMLA-qualifying reason.

The case, Srouder v. Dana Light Axle Manufacturing, LLC, 725 F.3d 608 (6th Cir. 2013), concerned assembly worker Matt White,[1] whose job required regular lifting of items ranging from 20 to 75 pounds.  In September 2009, White suffered a recurrence of stomach problems, including a hernia.  During that month, he took several days of FMLA leave.  On September 25, White reported to work but was sent home after failing to timely submit completed FMLA paperwork for previous absences.

 

On September 30, White met with Dana management to discuss his ongoing failure to submit proper and timely documentation for his FMLA-related absences.  At this meeting, White submitted a doctor’s note restricting him from lifting over 20 pounds.  The HR manager informed White that given this restriction, he could not work in the plant, and he responded that he would speak to his physician to have the weight restriction removed.  In addition, while the exact nature of the discussion was disputed between the parties, White informed Dana about his stomach problems and his possible need for hernia surgery.  It was White’s understanding that he had adequately informed Dana at the meeting that he would in fact be imminently having surgery and thus would require additional FMLA leave.

White did not report to work and also failed to call in his absences from October 1 through 6.  His failure to call in his absences violated Dana’s “no fault” attendance policy, which required employees to call a certain phone number each day they were absent.  The policy further provided that, “[i]f an individual fails to report to work for two days and has not called in, that person is considered to have voluntarily quit.”  On October 6, Dana sent a letter to White stating that he was deemed to have voluntarily terminated his employment due to his failure to comply with the attendance policy.  On October 7, before receiving the termination letter, White dropped off his completed FMLA paperwork at Dana’s facility and underwent hernia surgery later that same day.

After his employment was terminated, White filed a lawsuit against Dana, asserting its termination of his employment pursuant to the no-fault attendance policy violated the FMLA, since Dana was notified at the September 30 meeting that he was going to have surgery and that he therefore would be absent for an FMLA-qualifying reason.  The Court of Appeals was asked to determine, “whether an employer may impose and enforce its own internal notice requirements, even if those requirements go beyond the bare minimum that would generally be sufficient under the FMLA to constitute proper notice.”  Id. at 613.  In answering this question, the Court noted that it held in a 2003 case that employers could not require employees to comply with attendance policies more strict than the FMLA.  However, the Court noted that the controlling FMLA regulation was “materially altered” in 2009, and that under the new regulation, Dana could lawfully require White to comply with its no fault attendance policy.  According to the court, under the revised regulation, “an employer may enforce its usual and customary notice and procedural requirements against an employee claiming FMLA-protected leave, unless unusual circumstances justify the employee’s failure to comply with the employer’s requirements.”  Id. at 615.  The Court found that White presented no evidence of “unusual circumstances” showing that he was unable to call in his absences from October 1 to 6, especially in light of the fact that he visited Dana’s facility on October 7, the same day as his hernia surgery.  Thus, the court concluded, “regardless of whether White provided sufficient FMLA notice to Dana during the September 30 meeting, Dana was nevertheless justified in terminating White’s employment for his failure to follow the call-in requirements of Dana’s attendance policy.”  Id.

As held by the Srouder case, employers may enforce their attendance policy against employees who also may be entitled to FMLA leave, even if the policy is more restrictive than the FMLA.  However, before adverse action, such as termination, is taken against an employee, a careful analysis must be performed to ensure that the employer has acted in accordance with the FMLA, its own policies and other governing laws.  In this regard, it is always best to seek the advice of counsel.

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 (313) 965-8524.

 Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee.


[1]               Everett Srouder was another plaintiff in the case who also sued Dana under the FMLA.  Srouder settled his claim so the Court of Appeals decided only White’s claim.