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Employment & Labor Seminar Presentation 2014 - Kansas City


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Employment & Labor Law Update
Presented by Dan O’Toole & Larry Tucker
In this session, learn about updates to federal Missouri and Kansas employment laws and cases

The National Labor Relations Board & Department of Labor in 2014
Presented by John Vering
Learn how the NLRB and Department of Labor continue to wind their way down the road of increased regulation for employers.

An Update on the Affordable Care Act & Employee Benefits
Presented by Jonathan Igoe
In this session, learn about how the Affordable Care Act affects you and your employees and hear about other updates to employee benefits law.

Distracted Driving
Presented by Shelley Ericsson
In this session, learn how plaintiff's lawyers are ramping up litigation efforts against employers whose employees cause accidents due to distracted driving; this includes accidents arising from talking, texting, and even hands-free usage of a cell phone while in the course of employment. Plus, find out how you can best protect your company from liability in these types of cases.

The EEOC Strategic Enforcement Plan
Presented by Dione Greene
In this session find out about the EEOC’s strategy to enforce anti-discrimination laws against employers in the new year.

Published in: Business
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Employment & Labor Seminar Presentation 2014 - Kansas City

  1. 1. © 2014 ArmstrongTeasdaleLLP
  2. 2. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP Dan O’Toole and Larry Tucker Presented by Employment & Labor Law Update
  3. 3. © 2014 ArmstrongTeasdaleLLP State ex rel. Sir v. Gateway Taxi Management Co. 400 S.W.3d 478 (Mo.App.2013)  Plaintiff sued cab company for refusingto hire him as a taxi cab driver because Plaintiff had suffereda stroke. Missouri Commissionon Human Rightsfound in favor of Plaintiff and awarded him damages.  Cab company challenged Commission’sfindingsthat: 1. Taxi cab drivers are “employees”and not independent contractors; and 2. Plaintiff was “disabled.”  Drivers leased cabs from cab company but company paid insurance and maintenance. Drivers kept all fares and tips and paid for gas and cleaning cab.
  4. 4. © 2014 ArmstrongTeasdaleLLP Sir (cont.)  The Missouri Human Rights Act does not define “employee.” Cab company urged use of the 20 factor IRS test.  Court applied dictionary definitions including “employ: to provide with a job that pays wages or a salary or with a means to earn a living.”  Independent contractors typically are hired to perform a “specific task, using their own tools, for a fixed sum and without control except as to the result.”  The MCHR’s conclusion that cab drivers are employees is supported by competent and substantial evidence.
  5. 5. © 2014 ArmstrongTeasdaleLLP Sir (cont.)  Court found that competent and substantial evidence supported conclusion that Plaintiff is substantially limited in major life activity of ambulation. • Plaintiff was not required to show he was unable to perform a broad range or class of jobs.  The MHRA does not permit punitive damages in proceeding before the MCHR. The MHRA permits “court” to award punitive damages in a “civil action.”
  6. 6. © 2014 ArmstrongTeasdaleLLP State ex rel. Hollins v. Pritchett 395 S.W.3d 600 (Mo. App. 2013)  Suit alleged that Beer, a Con-way Trucking manager whose office was located in the City of St. Louis, persuaded a manager in Poplar Bluff not to hire Plaintiff for a job in Poplar Bluff because Plaintiff is a black female.  Beer managed twelve (12) terminals in five states and was out of the office about 75% of the time.  Plaintiff alleged “upon information and belief” that Beer was in his St. Louis office on at least one occasion when he discouraged Plaintiff’s hiring.
  7. 7. © 2014 ArmstrongTeasdaleLLP Hollins (cont.)  Plaintiff sued in the City of St. Louis but case was transferred to Butler County at Defendant’s request based on improper venue.  Court of Appeals issues a writ of mandamus ordering the case transferred back to the City of St. Louis.  The record showed that Plaintiff had an honest and objectively reasonable basis to believe that venue was appropriate in the City of St. Louis.
  8. 8. © 2014 ArmstrongTeasdaleLLP Plengemeier v. Thermadyne Industries, Inc. 409 S.W.3d 395(Mo.App. 2013)  Plengemeier resigned her employment on January 13, 2010 and on January 10, 2012 filed suit under the MHRA claiming discriminatory pay, denial of promotion and failure to provide a company car.  The MHRA requires suit to be filed no later than two years after the last discriminatory act. Trial court dismissed suit as untimely.  Court of Appeals reversed. Plengemeier’s suit was timely under the continuing violation theory since the last act of discrimination occurred within two years of the filing of suit. Plengemeier’s last paycheck was dated January 22, 2010.
  9. 9. © 2014 ArmstrongTeasdaleLLP Farrow v. Saint Francis Medical Center 407 S.W.3d 579(Mo.banc 2013)  Farrow given notice of discharge on December 10, 2008.  Farrow filed a charge of sexual harassment and retaliation with the MCHR on July 27, 2009 and thereafter files a lawsuit.  MHRA requires charge of discrimination to be filed within 180 days of alleged discriminatory act.
  10. 10. © 2014 ArmstrongTeasdaleLLP Farrow (cont.)  Circuit Court grants summary judgment against Farrow because her claims are time-barred. Court of Appeals affirms.  MCHR’s issuance of a notice of right to sue means that MCHR found charge to be timely filed.  Employer must challenge MCHR’s action in petition for administrative review.  Employer’s failure to file petition for administrative review bars challenge to timeliness in action filed by employee.
  11. 11. © 2014 ArmstrongTeasdaleLLP Farrow (cont.)  St. Francis claimed it was not an “employer” under the MHRA and submitted letters from the MCHR in five prior charges supporting this assertion.  The MHRA defines “employer” to exclude “corporations and associations owned and operated by religious or sectarian groups.”  Supreme Court finds that St. Francis does not satisfy the exemption. St. Francis is a not-for-profit corporation and a not-for-profit does not have any “owners.”
  12. 12. © 2014 ArmstrongTeasdaleLLP Farrow (cont.)  Supreme Court dismisses public policy wrongful discharge claim against doctor because he is not an employer.  Supreme Court dismisses tortious interference claim against doctor because doctor was Farrow’s supervisor acting on behalf of the hospital. Tortious interference claim requires third party.
  13. 13. © 2014 ArmstrongTeasdaleLLP
  14. 14. © 2014 ArmstrongTeasdaleLLP Coyle v. City of St. Louis 408 S.W. 3d 281 (Mo.App. 2013)  Coyle filed a denial of promotion claim under the MHRA after he did not receive a promotion to Fire Chief.  Coyle prevailed at trial but the Court denied (by failing to rule on)Coyle’s motion to amend judgment to instate him as Fire Chief or award him front pay.  City did not dispute Coyle’s contention that the jury’s verdict did not make him whole and conceded that limited front pay should be awarded.
  15. 15. © 2014 ArmstrongTeasdaleLLP Coyle (cont.)  Court of Appeals remands case so trial court can calculate front pay and consider other equitable relief.  Was it appropriate to concede that the judgment did not make Coyle whole since it did not include a promotion or front pay? • Coyle only had to prove that race contributed to the denial of promotion to prevail. • A verdict in Coyle’s favor does not necessarily mean that he would have been promoted.
  16. 16. © 2014 ArmstrongTeasdaleLLP State ex rel. Washington University v. Richardson 396 S.W.3d 387(Mo. App. 2013)  Student sued University under the “public accommodation” provisions of the MHRA alleging that she was sexually harassed by her academic advisor and subjected to retaliation after she complained.  Circuit Court prohibited the MCHR from acting on student’s complaint finding that the Master of Fine Arts program at University was not a place of public accommodation.  University was “open to the public” because term includes a “subset of the public.”  Doe v. Kansas City, Missouri School District, 372 S.W.3d 43 (Mo. App. 2012)
  17. 17. © 2014 ArmstrongTeasdaleLLP Hedrick v. Jay Wolfe Imports 404 S.W.3d 454 (Mo.App. 2013)  Car dealership had policy requiring household members of employees to either buy Honda from Wolfe or give Wolfe chance to meet competitor’s price.  Hedrick was discharged after his girlfriend bought a Honda from a competitor. Hedrick then filed a wrongful discharge lawsuit.  Public policy must be expressed by constitutional provision, statute or regulation.  Court of Appeals affirms dismissal because Hedrick’s discharge did not violate a clear mandate of public policy.
  18. 18. © 2014 ArmstrongTeasdaleLLP Clemmons v. Kansas City Chiefs Football Club, Inc. 397 S.W.3d 503 (Mo. App. 2013)  Clemmons was fired after 38 years of employment and then sued for age discrimination. Chiefs moved to compel arbitration based on agreement Clemmons signed two years after he started working.  Court must determine: • Whether an arbitration contract exists; • Whether the dispute is covered by the contract; and • Whether the contract is subject to revocation under contract principles.  Court of Appeals found the arbitration agreement invalid because there was no consideration: • No mutual promise to arbitrate; • Continued at-will employment is not sufficient consideration.
  19. 19. © 2014 ArmstrongTeasdaleLLP Sniezek v. Kansas City Chiefs Football Club, Inc. 402 S.W.3d 580 (Mo. App. 2013)  Sniezek was fired after 28 years of employment and then sued for age discrimination. Chiefs moved to compel arbitration based on an arbitration agreement Sniezek signed on her first day of work.  Court of Appeals found the arbitration agreement invalid because there was no consideration.  Employment-at-will relationship already existed at time Sniezek signed arbitration agreement.
  20. 20. © 2014 ArmstrongTeasdaleLLP Johnson v. Vatterott Educational Centers, Inc. 410 S.W.3d 735(Mo.App. 2013)  Plaintiff hired as Director of Admissions in June 2009.  On March 15, 2010, Defendant gave Plaintiff an Employee Handbook that contained a section titled “At Will Employment and Binding Arbitration Agreement,” which was signed by Plaintiff and Defendant’s HR director.  Plaintiff was discharged and filed suit alleging racial discrimination, harassment, and retaliation in violation of the MHRA.  The Circuit Court denied the motion to compel arbitration, finding that the arbitration agreement was not enforceable.
  21. 21. © 2014 ArmstrongTeasdaleLLP Johnson (cont.)  On appeal, the Missouri Court of Appeals affirmed.  Although the arbitration agreement contained provisionsstating that it was a binding and enforceable contract, other provisions of the handbook made it clear that nothing in the handbook was contractual and that the handbook could be changed at employer’s discretion.  Additionally, the arbitration agreement was not executed by a representative with authority to bind Defendant. • The handbook explicitly stated that only Defendant’s President could execute any “agreement . . . for employment other than at-will.” • Other provisions indicated that “[n]o statement or promise by a supervisor, manager, or department head . . . will constitute an agreement with an employee.”
  22. 22. © 2014 ArmstrongTeasdaleLLP State ex rel. Hewitt v. Kerr ____ S.W.3d ____, 2013 WL 5725992 (Mo.App., Oct. 22, 2013)  Arbitration agreement required disputes to be submitted to the NFL Commissioner, who is elected by the NFL teams.  Court finds the provision requiring disputes to be submitted to Commissioner to be unconscionable.  The Court strikes the provision from the contract and enforces the remaining provisions of the arbitration agreement.
  23. 23. © 2014 ArmstrongTeasdaleLLP Central Trust and Investment Co. v. Kennedy __ S.W.3d __, 2013 WL 268687 (Mo.App. 2013)  Customer contact information is not a “trade secret” under the Missouri Uniform Trade Secrets Act.  The proper means of protecting customer contacts is a noncompetition agreement.
  24. 24. © 2014 ArmstrongTeasdaleLLP JumboSack Corp. v. Buyck 407 S.W.3d 51(Mo.App. 2013)  Buyck was a salesperson in 2003 at $70,000 plus a car allowance and expenses. Six months later, Buyck signed a non-compete agreement under threat of discharge.  Non-compete said “Any changes in Employee’s compensation, position or job…shall in no way void or otherwise affect the remaining provisions of this Agreement.”
  25. 25. © 2014 ArmstrongTeasdaleLLP JumboSack (cont.)  In 2005, Buyck’s salary changed to $57,000 plus 1.5% commission. Later reduced to 1.25%.  Buyck resigned when he learned of impending reduction to $50,000 and a new policy requiring salespersons to repay one-third of any unpaid invoice.  Buyck joined competitor and was promptly sued for breach of the non-compete agreement. Trial court granted summary judgment for Buyck because of prior breach by employer and lack of consideration.
  26. 26. © 2014 ArmstrongTeasdaleLLP JumboSack (cont.)  Continued at-will employment, which provides continued access to protectable assets and relationships, is sufficient consideration to support non-compete agreement.  Court recognizes prior breach doctrine as a defense but finds that fact issues relating to the effect of compensation changes precluded summary judgment.
  27. 27. © 2014 ArmstrongTeasdaleLLP Vance v. Ball State University 133 S.Ct. 2434 (2013)  Cateringassistantsued for racial harassmentunder Title VII.  Under Faragher/Ellerthdecisions,strict liability if supervisor harassmentresultsin tangible employment action.  Narroweddefinitionof “supervisor”for Title VII harassment claims.  Coworkerwho controlsemployee’sdaily activities but lacks authorityto maketangibleemployment decisions(e.g., hire, terminate,demote, promote,transfer,discipline) is not a “supervisor.”  If coworkerharassment,employer only liable if knew or should have knownof harassmentand failed to take prompt remedial action.
  28. 28. © 2014 ArmstrongTeasdaleLLP University of Texas Southwestern Medical Center v. Nassar - 133 S.Ct. 2517 (2013)  Increased burden of proof for retaliationclaims under Title VII and similar statutes.  Applied “but for” causationstandard rather than less demanding “motivatingfactor.”  Doctorof Middle Eastern descent complained about religiousand ethnic discriminationby his supervisor at the University.  Chair of Internal Medicine convinced hospitalnot to hire Dr. Nassar based on prior agreementwith Universityregardingfaculty and to punish him for discriminationcomplaintabout supervisor.  Must showadverse action occurred because of protectedconduct and no otherreason.
  29. 29. © 2014 ArmstrongTeasdaleLLP U.S. v. Windsor 133 S.Ct. 2675 (2013)  Surviving spouse of same sex couple was denied spousal tax deduction due to definitions of “spouse” and “marriage” in the Defense of Marriage Act (DOMA).  Definition of “marriage” as between one man and one woman violates Equal Protection Clause of U.S. Constitution.  Potential impact on application of FMLA which provides leave for serious health condition of “spouse.”  Consequences for other leave/benefit laws and plans.
  30. 30. © 2014 ArmstrongTeasdaleLLP Bennett v. Riceland Foods, Inc. 721 F.3d 546 (8th Cir. 2013)  Two Caucasian maintenance workers complained to employer about supervisor making racist comments about African-American workers.  After minimal investigation, employer concluded complaints lacked merit.  Supervisor was angry about complaints.  As part of cost cutting measure, supervisor proposed eliminating complainants’ jobs.  Two Caucasian employees sued claiming retaliation under Title VII and Section 1981.  Company liable under “cat’s paw” theory because althoughsupervisor was not the ultimate decisionmaker, he influenced the decision.
  31. 31. © 2014 ArmstrongTeasdaleLLP Lucas v. Jerusalem Cafe, LLC 721 F.3d 927 (8th Cir. 2013)  For three years six unauthorized aliens worked in a KC cafe.  Some of the workers were paid less than minimum wage and none received overtime pay.  Workers sued the Cafe, its owner and manager for violating the FLSA.  FLSA applies to employers who illegally hire unauthorized aliens and workers could recover lost wages, liquidated damages and attorneys’ fees.
  32. 32. © 2014 ArmstrongTeasdaleLLP Wright v. St. Vincent Health System 730 F.3d 732 (8th Cir. 2013)  Surgery tech received write ups for poor performance.  Supervisor spokewith Human Resourcesabout terminating employee.  Next day employee complained about race discriminationand harassment.  Hospital terminatedemployee 48 minutesafter complaint.  Tech sued hospital under Title VII allegingrace discriminationand retaliation.  Althoughtimingraised inference of retaliation,employer showed that it had decided to dischargetech due to performance and insubordinationbefore protectedactivity.
  33. 33. © 2014 ArmstrongTeasdaleLLP Dollar v. Smithway Motor Xpress, Inc. 710 F.3d 798 (8th Cir. 2013)  Dollar worked for employer as a driver manager. Employer threatened to reassign Dollar to a different position (driver recruiter)because of attendance issues.  Dollar was absent because of psychiatric issues but never requested or was provided with FMLA leave. Employer discharged Dollar before FMLA leave would have expired.  Dollar admits she could not perform essential functions of the “driver manager” job when FMLA would have expired but claims she could have worked as a driver recruiter.
  34. 34. © 2014 ArmstrongTeasdaleLLP Dollar (cont.)  Following FMLA verdict for Dollar, Employer claims that Dollar’s admission she could not perform “driver manager job” should have been dispositive. Employer notes that FMLA does not impose a reasonable accommodation requirement.  “While not a duty to provide reasonable accommodation, the FMLA duty of restoration clearly and expressly broadens the employer’s obligation beyond a narrow focus solely on the actual position held by the employee before the onset of the serious health condition and extends to equivalent positions.”  Verdict for Dollar affirmed but front pay award is reversed.
  35. 35. © 2014 ArmstrongTeasdaleLLP Owen v. Bristol Care, Inc. 702 F.3d 1050 (8th Cir. 2013)  Nursing home administrator signed employment agreement when hired that contained mandatory arbitration provision.  Arbitration provision prohibited parties from arbitrating class claims.  Owen filed collective action on behalf of herself and other administrators claiming they were improperly classified as exempt under FLSA and denied overtime pay.  Contrary to NLRB’s position, class action waivers are valid in mandatory arbitration provision.
  36. 36. © 2014 ArmstrongTeasdaleLLP Knutson v. Schwan’s Home Service, Inc. 711 F.3d 911 (8th Cir. 2013)  Location General Manager for frozen food delivery service suffered eye injury.  No longer DOT certified to drive delivery trucks.  After termination, sued for violation of ADA.  Driving delivery truck was an essential function of manager job even though rarely performed.  Relied on employer’s job description and offer letter which required DOT certification to drive trucks.
  37. 37. © 2014 ArmstrongTeasdaleLLP Olsen v. Capital Region Medical Center 713 F.3d 1149 (8th Cir. 2013)  Mammographytechnicianwith epilepsy sued for failure to accommodateunder the ADA and MHRA.  Employee had fourteen seizuresat worksome of which occurred while attendingto patients.  Hospital made numerouseffortsto provide accommodation including redirectingsome patients, removingmold, reducing brightnessand glare of lights and eliminatingscrolling from computers,and providing three leaves of absence.  Tech claimed needed intermittentleave to recover from seizures as accommodation.  Employee not qualifiedindividual with a disability because could not safely operatesophisticatedmedical equipmentand interact with patients.
  38. 38. © 2014 ArmstrongTeasdaleLLP  The court affirmed a grant of summary judgment in UPS’ favor by Judge Julie Robinson in the District of Kansas. Judge Robinson had found that plaintiff could not prove a prima facie case of retaliation, and even if he could, that he could not prove that his termination was in retaliation for his filing a workers’ compensations claim.  Employee was terminated for dishonesty by UPS in November of 2009. Macon v UPS, Decided February 19, 2014, 10th Circuit Court of Appeals
  39. 39. © 2014 ArmstrongTeasdaleLLP Macon (cont.)  He filed a grievance and pursued it to a hearing before a two- state panel made up of representatives of management and the Teamsters’ union.  The two-state panel unanimously agreed the termination was appropriate.  Macon sued claiming he had been terminated because he had filed a workers’ compensation claim.
  40. 40. © 2014 ArmstrongTeasdaleLLP Macon (cont.)  The workers’ compensation claim was filed fifteen months before Macon was terminated.  The court focused on whether Macon could prove that the non- retaliatory reason for his termination was merely a pretext.  Macon said the expressed reason for his termination was a mere pretext because: (A) UPS had engaged in a pattern of retaliatory conduct; (B) he was not, in fact, dishonest; and (C) other similarly situated employees were not terminated for the same offense.
  41. 41. © 2014 ArmstrongTeasdaleLLP Macon (cont.)  The court disagreed with Macon’s first argument because he disregarded the findings of the two-state panel. The fact that the CBA in place put the ultimate decision about whether the termination was appropriate in the hands of that panel was found to be very significant in undercutting Macon’s claims that his supervisors had singled him out for discipline after he had filed his workers’ compensation claim.  The court disagreed with Macon’ claims of personal honesty, again measuring his claims against the work done by the two- state panel. It concluded that the panel reasonably could have concluded that he was dishonest and not as he argued, just improperly trained.
  42. 42. © 2014 ArmstrongTeasdaleLLP Macon (cont.)  Macon’s argument about how other employees were treated was rejected as well by the court. Once again, the court gave heavy weight to the existence and performance of what it called an “independent grievance panel”. The court pointed to other instances of discipline where the two-state panel had not upheld UPS’ discipline against Macon as evidence that the process was fair and not retaliatory.  The court ignored the lack of temporal proximity between the filing of the workers’ compensation claim and the alleged retaliation.
  43. 43. © 2014 ArmstrongTeasdaleLLP Lykins v Certainteed Corporation, Decided February 12, 2014, 10th Circuit Court of Appeals (unpublished opinion)  Plaintiff appealed the district court’s grant of summary judgment on his claim of being discharged in retaliation for reporting wrongdoing as a “whistleblower”.  Mr. Lykins had reported to various supervisors at the plant where he worked his concerns that he thought other employees were handling and disposing of toxic waste materials improperly.
  44. 44. © 2014 ArmstrongTeasdaleLLP Lykins (cont.)  The employee said his bosses were not receptive to his complaints. He never reported the alleged environmental law violations to any governmental agency before he was terminated.  Lykins had been given an employee handbook with information on how to make reports of known or suspected company violations. He made no investigation into whether the company was handling the waste products in accord with the wastewater discharge permit it held.
  45. 45. © 2014 ArmstrongTeasdaleLLP Lykins (cont.)  When Mr. Lykins got a poor work performance letter, he refused to accept it or sign that he had received it. He told plant management that he thought he was being retaliated against with the letter and the threat that if he did not sign the letter he would be terminated. After telling his story, he was terminated.  Mr. Lykins sued for retaliatory discharge. The employer and an individual defendant moved for summary judgment and the court granted the motions.
  46. 46. © 2014 ArmstrongTeasdaleLLP Lykins (cont.)  In reviewing the trial court decision , the Court of Appeals found that Kansas law requires a whistleblower to seek to stop unlawful activity through intervention of a higher authority which can be either inside or outside the place of employment. Reporting the conduct to the alleged wrongdoer alone was not sufficient to meet that requirement.  The court held that a person seeking the protection of a whistleblower must report alleged unlawful conduct either to someone above the alleged wrongdoer or to an outside authority. Mr. Lykins conceded he had not done either.
  47. 47. © 2014 ArmstrongTeasdaleLLP Lykins (cont.)  Also supporting the court’s decision was the fact that Mr. Lykins had been educated about the means by which he could make reports of actual or suspected company misconduct by being provided an employee handbook with this information in it. Included in that handbook was a discussion of the avenues an employee had for lodging a complaint including the use of a “hot line” which would be accessed anonymously.  The court held that Mr. Lykins was not entitled to the status of a “whistleblower” and affirmed the trial court’s grant of summary judgment.
  48. 48. © 2014 ArmstrongTeasdaleLLP Deboard v. Mercy Health System of Kansas, Inc., Decided November 26, 2013, 10th Circuit Court of Appeals  The employee lost her suit against her former employer for sexual harassment and retaliation in violation of Title VII. The Court of Appeals affirmed the grant of summary judgment in favor of her former employer.  Ms. Deboard claimed that the employer knew or should have known that her supervisor had created a hostile workplace through unwanted touching and sexual remarks. She also claimed that her employer did not do enough to prevent sexual harassment in the workplace and that when she reported the harassment, she claimed, she was fired in retaliation.
  49. 49. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  The conduct about which Ms. Deboard complained had started some five years before her termination. She admitted that she had never reported that conduct to her employer. Yet, she said the employer knew or should have known it was going on because other employees had experienced the same conduct.  The conduct to which Ms. Deboard pointed had occurred eight years before the employer received actual notice of her own complaints. That earlier incident was not shown to be either substantially similar or repeated in the intervening years.
  50. 50. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  The first time the employer received notice that Ms. Deboard was making a complaint is when it saw a Facebook posting by Ms. Deboard which made indirect references to her supervisor touching her improperly. When confronted by her employer about the postings, she denied having authored them. Later she admitted that she had written them.  The employer demonstrated that once it had notice of Ms. Deboard’s complaints it conducted a thorough and fair investigation. During that investigation, Ms. Deboard said she did not want to file a formal complaint against her supervisor.
  51. 51. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  Later, the employer determined that another complaint made by Ms. Deboard that she had been overpaid in the past was false. HR determined that Ms.Deboard was sending messages to other employees accusing the employer of misconduct in the investigation. It was determined that he messages had disrupted the workday at the hospital. As a result, Ms. Deboard was terminated.
  52. 52. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  The court made a detailed analysis of whether the employer had actual or constructive notice of the alleged sexual harassment by Ms. Deboard’s supervisor. It determined that Ms.Deboard had failed to meet her burden of showing that notice. The court found that the employer had sound policies in place seeking to prevent harassment and that Ms. Deboard was well informed of them. The court also focused on the prompt and effective response made by the employer when it saw the Facebook posting.
  53. 53. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  The court addressed the claim that Ms. Deboard had been retaliated against by focusing on whether she was able to show that the reason for her termination was a pretext. Ms. Deboard did not dispute the grounds for her termination. She conceded she had posted inflammatory messages on the internet and had sent provocative messages to co-workers. The court concluded that she failed to show the existence of a pretext.
  54. 54. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  One odd feature of the case is that the HR director’s determination that Ms. Deboard had never been overpaid as she had alleged, was determined after her termination to be inaccurate. A more detailed search of pay records found there had been at least one incident of overpayment. However, the court determined that the HR director reasonably believed that Ms. Deboard had lied about this issue when she was terminated.
  55. 55. © 2014 ArmstrongTeasdaleLLP Deboard (cont.)  Ms. Deboard attempted to argue that using Facebook to report sexual harassment was a valid way to do that and that as a result of the Kasten v Saint-Gobain Performance Plastics Corp. case decided by the U. S. Supreme Court she could not be fired for using that means of reporting. That case which dealt with the anti-retaliation provision of the Fair Labor Standards Act said that the provision extended to oral as well as written reports of alleged misconduct. The 10th Circuit distinguished that case because the employer for Mr. Deboard had methods for making reports about which she knew, but did not use.
  56. 56. © 2014 ArmstrongTeasdaleLLP Dickens v Creative Business Solutions, LLC, (D. Kan 2013)  Be careful what you say when you are asked to comment on an applicant for a job.
  57. 57. © 2014 ArmstrongTeasdaleLLP Dickens (cont.)  Ms. Dickens said she was not hired by the United Way because an outside HR contractor, CBS, told United Way that it knew Ms. Dickens and that there were “red flags” concerning her and that she would not be a “good fit” for United Way.  CBS was sued by Ms. Dickens claiming a violation of 42 USC §1981 and tortious interference with her business expectancy.
  58. 58. © 2014 ArmstrongTeasdaleLLP Dickens (cont.)  CBS moved to dismiss the case and the District Court denied that motion.  Based on the face of the pleadings, the court found that Ms. Dickens had stated a valid claim.  The president of CBS which provided HR services to United Way and also had provided it to a former employer of Ms. Dickens, is alleged to have called United Way after it had decided to hire Ms. Dickens. The offer to hire her was withdrawn.
  59. 59. © 2014 ArmstrongTeasdaleLLP Dickens (cont.)  CBS knew that Ms. Dickens had worked for Florence Crittenton Services in Topeka. She knew that Ms. Dickens had omitted that employment from the resume she provided United Way. She also knew that Ms. Dickens had filed an administrative charge against Crittenton and then sued for race and disability discrimination. Ms. Dickens alleged that CBS had used this information to cause United Way to reverse its decision to hire her.  The court found that Ms. Dickens had made the necessary allegations to keep her case alive.
  60. 60. © 2014 ArmstrongTeasdaleLLP Dickens (cont.)  The lesson: If asked for information about a former employee, the better practice is to follow the advice of providing only limited information such as; Dates of employment; pay range; job description and duties and wage history. Under Kansas statutory law, if a written request for information is provided, additional information can be provided under some limited circumstances. See, KSA 44- 119A, “Employer immunity from liability and suit for disclosure of employment administration.”  The best practice is to provide only very limited, truthful information.
  61. 61. © 2014 ArmstrongTeasdaleLLP Contact Dan O’Toole 314.621.5070 Larry Tucker 816.221.3420
  62. 62. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP Employee Benefits Update Jonathan W. Igoe Presented by
  63. 63. © 2014 ArmstrongTeasdaleLLP Affordable Care Act 63
  64. 64. © 2014 ArmstrongTeasdaleLLP 2010-2012 Key Provisions  These changes apply whether or not a plan is grandfathered.  Dependent coverage up to age 26  No pre-existing condition exclusion for those under age 19  Limitation on Flexible Spending Account (FSA) coverage for over-the-counter medications  Removal of lifetime and phase out of annual dollar limits for essential health benefits  Summary of Benefits and Coverage (SBC) 64
  65. 65. © 2014 ArmstrongTeasdaleLLP 2013  FSA deferral limit capped at $2,500 annually  Exchange notice issued to employees  Medicare payroll tax increased from 1.45% to 2.35% on employee’s earned income above $250,000 (employee only tax)  New Medicare 3.8% tax on net investment income for taxpayers with income above $250,000 65
  66. 66. © 2014 ArmstrongTeasdaleLLP Effective in 2014  Waiting period in excess of 90 days once employee is eligible to enroll is prohibited  No pre-existing condition exclusion regardless of age  Prohibition on annual limits on dollar value of coverage for essential health benefits  Automatic enrollment required for employers with more than 200 full-time employees (DELAYED) 66
  67. 67. © 2014 ArmstrongTeasdaleLLP Pay or Play Rules/Shared Responsibility  Originally to be effective in 2014 but delayed one year to 2015  Additionaldelays and transitionrules announcedearlier this month Individual Mandate  Individual must have minimumessential coverageor pay shared responsibilitypenalty • Penalty in 2015:greater of 2% of incomeover filing threshold or $325per adult ($975maximumfor family)  No penalty if individual covered by employer-sponsoredgroup health plan  No penalty if individual covered by individual health insurance policy throughExchange 67
  68. 68. © 2014 ArmstrongTeasdaleLLP Employer Mandate  Applies on calendar-yearbasis  Applies only to employers which employ on average 50 full-time (“FT”) employees on business days during prior calendar year. • Regulationsprovideformulafor convertingpart-time and seasonal employeesto FT equivalents for determiningwhether employer has 50 FT employees  Employer avoids penaltyby offeringto • At least 95% of FT employeesand dependents (not spouse)( but see transition rules) • Minimumessential coveragewhich has • Minimumvalueand is • Affordable for employee − Employee’s share of cost of self-only coverage no greater than 9.5% of employee’s household income 68
  69. 69. © 2014 ArmstrongTeasdaleLLP Action Items for Employer Shared Responsibility Analysis  Determining FT status • 130 hours per month treated as 30 hours per week • Actual hours worked vs. equivalency method • Final regulations provide some additional clarity as to who is FT  Determine measurement period for calculating FT status for ongoing employees • 3 to 12 months (note transition rules)  Initial measurement period for calculating FT status for new employees • Applies to new employees and variable hour and seasonal employees not reasonably expected to work 30 hours per week • Seasonal employees now defined to mean individuals who do not work more than six months. (This definitionis different than the one used for determining if an employer has at least 50 FTs.)69
  70. 70. © 2014 ArmstrongTeasdaleLLP Pay or Play Excise Tax for Employers  No Coverage Penalty • Imposed if employer does not offer minimum essential coverage to 95% of FT employees and one such employee is enrolled in an Exchange and entitled to a premium tax credit • Penalty is $2,000 times number of FT employees excluding first 30 employees • Penalty indexed for inflation • See transition rules 70
  71. 71. © 2014 ArmstrongTeasdaleLLP  Insufficient Plan Penalty • Imposed if employer does offer minimum essential coverage to FT employees, but such coverage lacks minimum value or is not “affordable” or • Imposed if employer offers minimum essential coverage to at least 95% of FT employees, but one of excluded FT employees obtains coverage through Exchange • Penalty is $3,000 per FT employee who is covered by Exchange and entitled to a premium tax credit • Penalty is indexed for inflation • See transition rules 71
  72. 72. © 2014 ArmstrongTeasdaleLLP Pay or Play/Shared Responsibility Planning  Evaluate whether medical plan coverage will be offered or employer will pay $2,000 penalty  If medical plan coverage offered • Confirm medical plan satisfies Minimum Essential Coverage • Confirm medical plan is affordable and document employee contribution does not exceed 9.5% of wages • Document that 95% of FT employees and dependents offered coverage with annual elections (see transition rules) • Review employee census to determine who qualifies as FT employee (30 hours per week/130 hours per month) • Keep plan documents updated to reflect pay or play provisions • Implement tracking programs to monitor information for part- time/seasonal employees 72
  73. 73. © 2014 ArmstrongTeasdaleLLP Transition Rules for 2015  Potentialpenalties for employers which have at least 50 FT or FT equivalentemployees but fewerthan 100 FT or FT equivalent employees have been delayed for one year.  To take advantageof the delay, employers have to provide a certificationthat certain conditionshave been met.  Employer may use a six consecutive monthperiod in 2014 to determine if it has at least 50 or at least 100 FT or FT equivalent employees for 2015.  For larger employers, plan only has to be offered to 70% (instead of 95%) of FT employees for purposes of the no coverage($2,000) penalty and the number of employees excluded for purposes of calculating the penalty is raised from 30 to 80. 73
  74. 74. © 2014 ArmstrongTeasdaleLLP Transition Rules for 2015 (cont’d.)  No delay or transitionrules for insufficientplan ($3,000) penalty for larger employers.  If a plan does not offer coverage to dependentsas required in order to avoid penalties, it can still avoid thosepenalties in 2015 if it takessteps this year to offer dependentcoverage for 2015.  Certain non-calendaryear plans can wait to comply until the start of their plan years in 2016  Plan may use a six monthmeasurementperiod,for determiningFT status,starting no later than July 1, 2014 and ending no earlier than 90 days before the first day of the 2015 plan year and still use a longer stability period in 2015 (such as 12 months). 74
  75. 75. © 2014 ArmstrongTeasdaleLLP Other Recently Announced Rules  Rules spelled out for monthly measurement periods as an alternative to look-back periods.  No liability for assessable payments in first year an employer is subject to the shared responsibility payment, if coverage is offered by April 1 of that year so long as coverage has minimum value  A former employee is treated as a new hire if not employed for at least 13 instead of 26 weeks (except for educational institutions)  Certain employees may be excluded from being counted as FT employees (e.g., volunteers, students on work-study programs)  Rules address possible calculation of hours for certain types of employees (e.g., airline employees and adjunct college professors) but still not yet for others (commissioned sales people) 75
  76. 76. © 2014 ArmstrongTeasdaleLLP Employer Reporting  If employer has more than 250 employees, employee’s2013 Form W-2 must include cost of employer provided health care coverage  If grandfatheredplan, must include statementon all benefits communication  UpdateCOBRA forms to reflect existence of Exchanges  Significantreportingfor pay or play rules, voluntary for 2014, mandatoryfor 2015  Issue SBCs  Expect final rules for reportingshortly 76
  77. 77. © 2014 ArmstrongTeasdaleLLP Same-Sex Marriage 77
  78. 78. © 2014 ArmstrongTeasdaleLLP Windsor Supreme Court decision  Struck down portion of Defense of Marriage Act (DOMA) which prohibited recognition of same-sex marriages under Federal law • Section 3 definitions of “marriage” and “spouse” are unconstitutional  Windsor does not require a state to recognize same-sex marriages performed in other state, nor does it require a state to permit same-sex marriages 78
  79. 79. © 2014 ArmstrongTeasdaleLLP Pre-Windsor  Simpler for plan administrators  For ERISA and IRC, same-sex couples not married regardless of provisions of state law 79
  80. 80. © 2014 ArmstrongTeasdaleLLP Post-Windsor  Many unanswered questions • Should Windsor be applied retroactively? • Does employer in Missouri have to recognize same-sex marriage of employee who is validly married under the law of another jurisdiction? • Very fluid situations – lots of lower court decisions generally favoring recognition of same-sexmarriages 80
  81. 81. © 2014 ArmstrongTeasdaleLLP  Current state of law • IRS ruling (State of Celebration Rule): Same-sexcouples treated as marriedunder IRC, so long as marriedin state which authorizes same-sex marriage,even if couple is domiciledin state which does not recognizesame-sex marriage − Does not apply to domestic partnerships and civil unions − Full retroactivity under IRC so long as statute of limitations open • Employers may cover legally married same-sex spousesunder medical plan without taxation to employee • Employeesmay receive tax-free reimbursement for expenses incurredby same-sex spousesunder FSAs • Same-sexspouses entitled to special enrollment rights under HIPAA • An increasing number of states by vote or decree recognize same- sex marriage 81
  82. 82. © 2014 ArmstrongTeasdaleLLP  Current state of law (cont’d.) • Same-sex spouses are legally entitled to qualified joint and survivor annuity and pre-retirement survivor annuity under qualified pension plans • Same-sex spouses entitled to 100% of participant’s 401(k) account upon participant’s death unless same-sex spouse consents to another beneficiary • Same-sex spouses may roll over distributions to their own IRAs • By Executive Order of Governor Nixon, Missouri will accept jointly filed tax returns from same-sex couples legally married in another state 82
  83. 83. © 2014 ArmstrongTeasdaleLLP Employer Decisions  REVIEWDEFINITIONS OF “SPOUSE”IN ALL PLAN DOCUMENTS  Will employer welfare benefit plans recognizesame-sexspouses? • ERISA does not require same-sex coveragein a medical plan  Awaitfurther guidanceconcerning retroactivity,especially survivor annuity rights under ERISA  When to amend retirementplan documentsrelating to definition of spouse  If prior to Windsoremployer was providing same-sexspousal coverage, determinationwhetheremployer wants to claim employment tax refunds on imputed income 83
  84. 84. © 2014 ArmstrongTeasdaleLLP Contact Jonathan Igoe 314.621.5070 84
  85. 85. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP The National Labor Relations Board and Department of Labor in 2014 It could be a very bumpy ride John Vering Presented by
  86. 86. © 2014 ArmstrongTeasdaleLLP
  87. 87. © 2014 ArmstrongTeasdaleLLP Agenda  National Labor Relations Board in 2014 • New Election Rules • Continued emphasis on Handbooks at non-union workplaces • Emphasis on duty to provide information to established unions  Department of Labor • Already have new requirements for Federal Contractors encouraging employment of veterans and the disabled under Amended ADA • Advice exemption to Persuader Reporting likely being eliminated
  88. 88. © 2014 ArmstrongTeasdaleLLP National Labor Relations Board  Fully constituted and senate confirmed Board and General Counsel.  The Supreme Court might order the new Board to revisit decisions of the previous Recess Appointed Board.  While the Board rules on cases and can make new law, the General Counsel decides what cases to litigate and what new areas of the law to pursue and bring to the Board.  The GC has stated a number of priorities:
  89. 89. © 2014 ArmstrongTeasdaleLLP NLRB General Counsel Agenda  A Union’s Right to Financial Information of Privately held companies  Aggressive use of 10(j) injunctions  Aggressive use of investigative subpoenas  First contract bargaining cases  Social Media  Handbooks  Arbitration Agreements – class waivers
  90. 90. © 2014 ArmstrongTeasdaleLLP NLRB Agenda  New Election Procedures • First proposedJune 2011and went into effect in April 2012. • Stayed pendinglegal action in the D.C. Circuit. • Boardvoluntarily dismissedits appeal on December 9, 2013. • The newly confirmedBoardreissued on February6, 2014without an issue over whether the Boardhas a lawful quorum.  Notice of Employee Rightsunder the NLRA • On January 7th the Board announcedit will not proceed with requiringemployersto post but is keepingit available if employers or employeeswant to post it. • Federal contractors are still requiredto post pursuant to Executive Order of the President.
  91. 91. © 2014 ArmstrongTeasdaleLLP New Proposed Election Rules Current Rules New Rules Initial hearing 7-14 days from filing of petition for election. Presume 7 days. More difficult to get a postponement. Most voter eligibility issues could be eliminated prior to the election at hearing. Only issuesthat relate to whether a QCR exists. Presume post-hearingbriefs. Post-hearing briefs only upon request. Presume election 42-days after petition (if no hearing). Presume election 7-14 days after petition. Request for Review of decision allowed. Requestsfor Review only granted in extraordinary circumstances. Post election appeal a right. Post election appeal at Board discretion.
  92. 92. © 2014 ArmstrongTeasdaleLLP Why is 42 Days Versus 10 Days Important Petition filed (1) (2) Letter to homes about petition (3) (4) Letter to home with election details (5) (6) (7) What is a union? (8) Posting 1 Constitution (9) (10) Posting 2 financials (11) (12) Posting 3– Oath of loyalty Speech #1; letter to homes #3 (13) (14) Dues (15) Posting 4 Dues calculation (16) (17) Posting 5 What could you buy? (18) (19) Posting 6 Dues vs. 401(k) Speech #2; Letter to homes #4 (20) (21) Collective Bargaining (22) Posting 7 CB defined (23) (24) Posting 8 Could losein bargaining (25) (26) Posting 9 Union Security/Dues checkoff Speech #3; letter to homes #5 (27) (28) Strikes (29) Posting 10 What is a strike? (30) (31) Posting 11 History of union strikes (32) (33) Posting 12 – permanent replacements; Speech 4; letter to homes #6 (34) (35) We are a good employer (36) Posting 13 – reminder of good benefits and pay (37) 25th Hour Speech – final letter to homes (38) 25th Hour Speech (39) NO CAMPAIGN MEETINGS (40) ELECTION (41)
  93. 93. © 2014 ArmstrongTeasdaleLLP Micro Units  A result of the NLRB decision in Specialty Healthcare. • So long as the petitioned for unit consists of a readily identifiable group of employees the Board will presume it is appropriate. • Why do we care? − Smaller units are easier to organize,easier to organizequietly and quickerto organize. − The standard coupled with the new election rules virtually eliminates any chance at a hearing to get a delay.
  94. 94. © 2014 ArmstrongTeasdaleLLP Continued Focus on Non-Union Employers  Non-union employees still have the right to engage in protected concerted activity and the Board wants that group to know it. • Talk about their benefits, pay, bonuses, supervisors, bosses, etc. • Talk about those issues to the media, on social media, etc. • Talk about those issues using your company e-mail.
  95. 95. © 2014 ArmstrongTeasdaleLLP Why the Focus on Non-Union employees and election issues?
  96. 96. © 2014 ArmstrongTeasdaleLLP How the DOL intends to Help Create a U-Turn  By all but eliminating the advice exemption to the “persuader rule”  What is the “persuader rule”? • Under the Labor ManagementReporting and Disclosure Act (LMRDA) both employers and labor consultants are required to report financial arrangements and payments between each other for either direct or indirect persuader activities. • Examples – flyers, speeches, letters to the home etc. • If a lawyer provided advice about how to lawfully communicate in compliance with the NLRA than the “advice exemption”provided that no reporting was required.
  97. 97. © 2014 ArmstrongTeasdaleLLP What Is DOL Changing?  Under the proposed rule a report will be required if the activity will result in indirect persuader activity or direct persuader activity regardless of whether it is also advice.  What does the DOL consider reportable activity?
  98. 98. © 2014 ArmstrongTeasdaleLLP Examples of Reportable Activity Persuader activities: Any activity to be performed where the object thereof is to directly or indirectly persuade employees concerning their rights to organize or bargain collectively through representatives of their own choosing, or the right to engage in any protected concerted activity in the workplace.
  99. 99. © 2014 ArmstrongTeasdaleLLP Examples Continued  Drafting, revising, or providing written materials for presentation, dissemination, or distribution.  Drafting, revising, or providing a speech for presentation to employees.  Drafting, revising, or providing audiovisual or multi-media presentations for presentation, dissemination, or distribution to employees.  Drafting, revising, or providing website content for employees.
  100. 100. © 2014 ArmstrongTeasdaleLLP Examples Continued  Planning or conducting individual or group employee meetings.  Developing or administering employee attitude surveys concerning union awareness, sympathy, or proneness.  Training supervisors or employer representatives to conduct individual or group employee meetings.  Coordinating or directing the activities of supervisors or employer representatives.  Establishing or facilitating employee committees.
  101. 101. © 2014 ArmstrongTeasdaleLLP Examples Continued  Developing personnel policies or practices. • Solicitationand distributionpolicies • Bulletin board • Access • Social media • Workplace investigations • Confidentiality • Pay and benefits • Pro-employee/opendoor philosophy • Alternative disputemechanism
  102. 102. © 2014 ArmstrongTeasdaleLLP Examples Continued  Deciding which employees to target for persuader activity.  Conducting a seminar for supervisors or employer representatives.
  103. 103. © 2014 ArmstrongTeasdaleLLP Why should I care?  The President and Treasurer of your organization are personally responsible for ensuring the report is filed and filed accurately.  Those individuals face federal criminal penalties for failing to do so as well as civil penalties.
  104. 104. © 2014 ArmstrongTeasdaleLLP What Needs to Be Reported by Employers  The nature of the relationship  Dates entered into  Money paid and for what services  Who performed the services
  105. 105. © 2014 ArmstrongTeasdaleLLP What Will Law Firms Have to Report  Not only the receipts from clients for reportable services but all receipts from any client that we performed reportable activities for.  All cash disbursements to employees of the firm.
  106. 106. © 2014 ArmstrongTeasdaleLLP Why Would DOL Do This?  Remember that graph?  The hope must be that companies will not want to disclose how much they spend on their lawyers so they might opt to “go it alone” and see what happens.  By going it alone the unions hope companies will be either too afraid of violating the NLRA to say anything or not aware of what all they actually can say.
  107. 107. © 2014 ArmstrongTeasdaleLLP Remember it is the Department of LABOR  Labor wants more members.  Labor has been losing membership at staggering rates.  Labor can’t win the battle as the rules are currently set and is hoping a combination of changes will tilt the odds in their favor.
  108. 108. © 2014 ArmstrongTeasdaleLLP Persuader Rule Conclusion  The final rule was due at the end of November but has been pushed back to March of 2014.  We expect legal challenges that will hopefully stay the implementation or enforcement.  The ABA submitted a strongly worded comment in opposition to the proposed rule as eviscerating the attorney-client privilege.  We are hoping for a final version that keeps in place the advice exemption for Attorneys but not Labor Consultants as President Clinton attempted to put in place.
  109. 109. © 2014 ArmstrongTeasdaleLLP Other DOL Initiatives  OSHA • Infectious Disease Standards − At the pre-rule stage and designedto develop regulationsto reduce the risk of worker exposureto infectious diseases, particularly in healthcare settings. • Injury and Illness Prevention Program − By September2014OSHA plans to issue a proposedrule requiringemployersto implementan Injury and Illness Prevention Program.
  110. 110. © 2014 ArmstrongTeasdaleLLP Other DOL Continued  Electronic Recordkeeping • Recently issued proposed rule would require employers to electronically file certain injuryand illness data and make it publicly available. Comment period expired Feb. 6, 2014.  Whistleblower Protection • Expecting final rules establishing procedures for filing whistleblower complaints under: the AffordableCare act of 2010; Section 806 of the Corporate and Criminal Fraud Accountability Act of 2010; National Transit Systems Security Act; Surface Transportation Assistance Act; Federal Railroad Safety Act; Consumer Financial Protection Act; Seaman’s Protection Act; FDA Food Safety Modernization Act; and the Moving Ahead for Progress in the 21st Century Act.
  111. 111. © 2014 ArmstrongTeasdaleLLP Other DOL Continued  Other Safety Standards • Comment periodon proposedrule on occupationalexposureto crystalline silica expired December2013. • Occupationalexposureto berylliumand combustibledust.  Office of Federal ContractorAffirmativeAction Requirements • By April 2014we expect to see another OFCCPrule specifically for the constructionindustry updatinggoals based on more recent data as the current goals are based on data from the 1970’s. • By May 2014OFCCPplans to issue proposedrules revising sex discriminationguidelinesfor federal contractors and subcontractors.
  112. 112. © 2014 ArmstrongTeasdaleLLP Other DOL Continued  Wage and Hour Division • By March 2014 we expect WHD to issue a revised definition of spouse under the FMLA consistent with the Supreme Court decision in United States v. Windsor. • We expect WHD to move forward with an initiative requiring employers to affirmatively inform employees of their status as either an employee or independent contractor and the basis for how their pay is computed.
  113. 113. © 2014 ArmstrongTeasdaleLLP Contact John Vering 816.221.3420
  114. 114. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP Employer Liability for Distracted Driving Shelley I. Ericsson Presented by
  115. 115. © 2014 ArmstrongTeasdaleLLP The Problem - Overview  Distracted driving is a serious problem • Attributable for 28% of all U.S. crashesannually − This equals 1.6 million crashes, causing 636,000 injuries and 10,000 deaths annually − At least 170,000 crashes annually are directly attributable to the texting while driving − Studies show that talking on the phone while driving carries the same risk as driving with a .08 blood-alcohol level National Safety Council,“Summary of Attributable Risk Estimate Model”; Human Factors; The Journal of the Human Factors and Ergonomics Society, 2006(Summer), 381-391.
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  117. 117. © 2014 ArmstrongTeasdaleLLP The Problem – Overview  According to the National Highway Traffic Safety Administration (NHTSA): • 80% of crashes caused by driver inattention • Biggestsources of inattention is cell phone use • Most drivers think they are more skilled than other drivers when it comes to multitasking while driving • Drivers distracted by mobile devices 4x more likely to have accident • More and more instinctive and second nature to immediately respondto incomingtext or email immediately U.S. Dept. of Transp., “Statistics and Facts about Distracted Driving”
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  119. 119. © 2014 ArmstrongTeasdaleLLP
  120. 120. © 2014 ArmstrongTeasdaleLLP What are the Costs to Employers?  Any business for which employees use cell phones while driving faces liabilities in the form of financial losses • Legal judgments • Increased insurance premiums • Workers’ compensation claims • Fines and repair costs  NHSTA estimates that on-the-job accidents cost employers over $24,500 per crash, $128,000 per injury, and $3.8 million per fatality NHSTA, “The Economic Burdenof Traffic Crasheson Employers”
  121. 121. © 2014 ArmstrongTeasdaleLLP Basis for Employer Liability from Employee- Caused Accidents  There are a variety of differentlegal theoriesunder which the employer may be found liable for the actions of an employee: • RespondeatSuperiorLiability • Negligent Hiring,Retention and Supervision • Negligent Entrustment  OSHA implications: • OSHA Asst. Sec. of Labor publicly announcedto employers “It is your responsibilityand obligationto have a clear, unequivocaland enforced policyagainst texting while driving. . . “ General Duty Clause, Section 5(a)(1) will be deemed violated if work is structured in a way that requires employee texting.
  122. 122. © 2014 ArmstrongTeasdaleLLP Hoskins v. King 676 F.Supp.2d 441 (S.C.D.C. 2009)  Sharon King serviced medical equipment for Siemens Medical Solutions and was issued a company car and cell phone.  King was on vacation when she ran over and killed Thomas Hoskins, who was cycling.  At the time of the accident, King was talking on her cell phone and tending to her two dogs.  Hoskins’ widow sued Siemens under the respondeat superior and negligent supervision theories and sued King for negligence.
  123. 123. © 2014 ArmstrongTeasdaleLLP Respondeat Superior Liability  Respondeat Superior Liability “holds the master liable for the acts of his servant.”  To establish liability for the master, the injured party must show that the servant was acting within the course and scope of the master’s business.
  124. 124. © 2014 ArmstrongTeasdaleLLP Negligent Supervision  A master may be liable for negligent supervision, even for acts outside the scope of employment, if the master knows or should have known that employing a specific servant created an undue risk of harm to the public.  An injured party may claim that the master acted negligently in entrusting his servant with a tool that created an undue risk of harm.
  125. 125. © 2014 ArmstrongTeasdaleLLP Negligence  Negligence requires proof of 1. A duty to a Plaintiff; 2. A breach of the duty by a negligent act or omission; 3. Proximate causation, and; 4. An injury or damages.  Punitive damages are available if there is clear and convincing evidence that a Defendant’s conduct was willful, wanton, or in reckless disregard of a victim’s rights.
  126. 126. © 2014 ArmstrongTeasdaleLLP Respondeat Superior Liability  King was on vacation returning from her wedding reception.  King had removed all of her work equipment from the car prior to her vacation.  King was talking with her best friend. The court found that Siemens was not responsible for Hoskins’ death because King was not acting in the course and scope of her employment.
  127. 127. © 2014 ArmstrongTeasdaleLLP Respondeat Superior Liability  What if King had been talking to her boss or to a customer?  What if King had been driving to a work assignment?
  128. 128. © 2014 ArmstrongTeasdaleLLP Negligent Supervision  Hoskins was killed in October 2007.  King had received speeding tickets in March 2005 and March 2007 but had no points on her license when hired.  King rear-ended another car in January 2007 during working hours. She may have been on her cell phone.  King was not speeding when the accident occurred.
  129. 129. © 2014 ArmstrongTeasdaleLLP Hoskins v. King (cont.)  The court found that King’s past conduct did not rise to a level that Siemen’s was on notice that King presented an unreasonable risk of harm to the public.  What if King had been involved in two prior accidents while talking on her phone?  What if King had been speeding?
  130. 130. © 2014 ArmstrongTeasdaleLLP Negligence and Punitive Damages  King was talking on the phone, attending to her dogs and adjusting the radio in the minutes before the accident.  The court found that King’s conduct was clearly indicative of negligence.  The court also found that the evidence was sufficient to justify an award of punitive damages against King.
  131. 131. © 2014 ArmstrongTeasdaleLLP Hunter v. Modern Continental Construction Co. 287 Ga. App. 689 (2007)  Stasium was a shift supervisor for Modern who was involved in an accident with Hunter while Stasium was on his way to work.  Stasium had called a co-worker around the time of the accident. The co-worker called Stasium back around the same time but Stasium did not answer.  Stasium had given his cell phone number to all his co-workers so he could be contacted regarding company business.
  132. 132. © 2014 ArmstrongTeasdaleLLP Hunter (cont.)  The evidence was sufficient to create a factual issue regarding respondeat superior liability.  Stasium could have been using the phone or distracted by the unanswered call.  What if Stasium had not been using his phone on the way to work?
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  134. 134. © 2014 ArmstrongTeasdaleLLP Montgomery v. State 369 S.W.3d 188 (Tex. Crim. App. 2012)  Montgomery hung up from a cell phone call and realized that she had just passed her exit.  Montgomery was driving slowly and abruptly changed lanes. A faster moving truck swerved to avoid Montgomery.  The truck clipped Montgomery’s car and Montgomery then hit Terrell Housley’s pickup truck.  Housely’s pickup flipped and ejected the passenger Chance Wilcox. Wilcox died as a result of a broken neck.
  135. 135. © 2014 ArmstrongTeasdaleLLP Montgomery (cont.)  Montgomery was convicted of criminally negligent homicide and sentenced to 10 years imprisonment and a $10,000 fine.
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  137. 137. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP What’s an Employer to Do? Preventative Measures
  138. 138. © 2014 ArmstrongTeasdaleLLP Management Recognition of the Concern Recognize and deal with the barriers • Lack of employee support • Competing job priorities • Lack of managementcommitment
  139. 139. © 2014 ArmstrongTeasdaleLLP Development of a Distracted Driving Policy  There are many examples available • Industry Groups • Insurance Companies • Government Sources • The Web  There is no one set formula  Feel free to modify one to reflect your culture  Modify policy to reflect the formatting of your current policies
  140. 140. © 2014 ArmstrongTeasdaleLLP Build Employee Support and Buy-In  Acknowledge the culture change  Make practical suggestions • Plan trips so that calls are unnecessary • Don’t schedule conference calls during travel times • Change voicemail greetings • Pull over for calls
  141. 141. © 2014 ArmstrongTeasdaleLLP Document Compliance  Get acknowledgments  Consider “pledge forms” TAKE THE PLEDGE The fight to end distracted driving starts with you. Make the commitment to drive phone-free today. Distracted driving kills and injures thousands of people each year. I pledge to:  Protect lives by never texting or talking on the phone while driving.  Be a good passenger and speak out if the driver in my car is distracted.  Encourage my friends and family to drive phone-free. SIGNATURE: _____________________________________________________________ DATE: ___________________________________________________________________
  142. 142. © 2014 ArmstrongTeasdaleLLP Re-enforce the Policy  Have a thank you message delivered a month or two after implementation  Include the message from time to time in employee communications  Do scary public service pieces from time to time
  143. 143. © 2014 ArmstrongTeasdaleLLP Chatman v. Coca-Cola (TX) 2012 Jury Awarded $24 million  A Texas jury awarded $24 million ($10 million in punitive damages and $14 million in actual damage) to a woman who was injured by a Coca-Cola driver talking on her cell phone.  The suit claimed that the victim had to undergo lumbar surgery after the Coca-Cola vehicle hit her car.  Court held that even though Coca-Cola had policy in place, that policy alone was insufficient as a defense and Coca-Cola was negligent
  144. 144. © 2014 ArmstrongTeasdaleLLP Policy Alone Does Not Absolve Employers of Liability  Many companies already have policies in place banning cell phone use  Few, if any, have procedures in place to enforce policies  To avoid or reduce employer liability: • Policy in place • Disseminate/train employees • Monitor/Enforce Compliance • Practice what you preach
  145. 145. © 2014 ArmstrongTeasdaleLLP Questions?
  146. 146. © 2014 ArmstrongTeasdaleLLP Contact Shelley I. Ericsson 816.221.3420
  147. 147. © 2014 ArmstrongTeasdaleLLP© 2014 ArmstrongTeasdaleLLP The EEOC’s Strategic Enforcement Plan: How the EEOC’s National Enforcement Priorities May Impact Your Business Dione C. Greene Presented by
  148. 148. © 2014 ArmstrongTeasdaleLLP Government Shutdown
  149. 149. © 2014 ArmstrongTeasdaleLLP EEOC’s 2013 Results – Employers Paid Record Amounts in Settlements  The EEOC’s administrative division raked in $327.1 million in voluntary payments from private sector employers in FY 2013  FY 2013’s voluntary payments are highest in EEOC’s history  Of the settlements reported in 2013, 63 involved allegations of systemic discrimination and accounted for approximately $40 million in payments.
  150. 150. © 2014 ArmstrongTeasdaleLLP EEOC Strategic Enforcement Plan  Combat employment discrimination through strategic law enforcement  Prevent employment discrimination by education and outreach  Deliver service through a skilled and diverse workforce and effective systems
  151. 151. © 2014 ArmstrongTeasdaleLLP The EEOC’s Strategic Enforcement Plan (“SEP”): 6 National Enforcement Priorities 1. Eliminating barriers in recruitment and hiring 2. Protecting immigrant, migrant and other vulnerable workers 3. Addressing emerging and developing employment discrimination issues 4. Enforcing equal pay laws 5. Preserving access to the legal system 6. Preventing harassment through systemic enforcement and targeted outreach
  152. 152. © 2014 ArmstrongTeasdaleLLP Today’s Agenda  Today we’ll focus on: • Eliminating Barriers in Recruitment and Hiring • Addressing Emerging & Developing Issues • Employer Best Practices
  153. 153. © 2014 ArmstrongTeasdaleLLP Eliminating Barriers in Recruitment & Hiring  Racial, ethnic, and religious groups, older workers, women and people with disabilities continue to confront discriminatory policies and practices at the recruitment and hiring stages.  In order to remove “barriers” to recruiting and hiring, the EEOC will target: • class-basedintentional hiring discrimination; and • facially neutral recruiting and hiring practices that adversely impact particular groups.
  154. 154. © 2014 ArmstrongTeasdaleLLP Eliminating Barriers in Recruitment & Hiring (cont.)  Policies and Practices Under Heightened Scrutiny: • The channeling/steeringof individuals into specific jobs due to their status in a particular group • Restrictive application processes • The use of screening tools (e.g. pre-employment tests, post- offer tests, background checks)
  155. 155. © 2014 ArmstrongTeasdaleLLP Substantial 2013 EEOC Verdicts & Settlements  $920,000 Settlement – EEOC v. Sedona Group • The EEOC alleged that this staffing company engaged in a pattern and practice of classifying and failing to refer job applicants based on their race, color, sex, national origin, age or disability.  $900,000 Settlement – EEOC v. It’s Just Lunch USA, LLC • The EEOC alleged that the company refused to hire men as dating directors and sales representatives
  156. 156. © 2014 ArmstrongTeasdaleLLP Substantial 2013 EEOC Verdicts & Settlements  $700,000 Settlement – EEOC v. Presrite Corp. • The EEOC alleged that the company engagedin a pattern of refusing to hire women for metal forging jobs  Employer Wins Dismissal of EEOC’s Lawsuit – EEOC v. Freeman Companies • A District Court held the EEOC’s evidence was unreliable and that the EEOC failed to show the employer’s background check policies created a disparate impact in violation of Title VII
  157. 157. © 2014 ArmstrongTeasdaleLLP Best Practices for Employers: Job Applications & Postings  Review your job postings and advertisements  Recruit in a way that grants access to a cross section of the protected classes  Be vigilant in how you distribute job applications – train your hiring personnel that they cannot refuse to give employment applications to people based on stereotypes and assumptions
  158. 158. © 2014 ArmstrongTeasdaleLLP Best Practices for Employers: Pre-Employment Tests  If you require job applicants take a test, the test must be necessary and related to the job.  Remember that you may not use a test that excludes workers age 40 or older if the test is not based on a reasonable factor other than age.
  159. 159. © 2014 ArmstrongTeasdaleLLP Best Practices for Employers: Credit Checks  Credit Checks - Avoid inquiries into an applicant’s credit rating, assets or liabilities, including bankruptcy filings or garnishments – these inquiries tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the job in question.
  160. 160. © 2014 ArmstrongTeasdaleLLP Best Practices for Employers: Criminal Background Checks  Criminal Background Checks – Avoid disqualifying applicants simply because she has an arrest or conviction. Remember your background check “checklist”: • Analyze convictions – not arrests • Business Necessity − Consider: • The nature of the offense • The amount of time that passed • The nature of the job sought
  161. 161. © 2014 ArmstrongTeasdaleLLP Addressing Emerging & Developing Issues  In order to prevent new and emerging discriminatory practices, the EEOC will monitor recent legislation, judicial and administrative interpretations, significant events, and it will facilitate early compliance with the law.
  162. 162. © 2014 ArmstrongTeasdaleLLP Addressing Emerging & Developing Issues (cont.)  What areas of the law are believed to be emerging employment issues? • Certain ADA issues, including: expanding ADA coverage, monitoring the provision of reasonable accommodations, strict leave policies, qualification standards, undue hardship and direct threat. • Accommodating pregnancy-related limitations under the ADAAA and the PDA • Coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions, as they may apply
  163. 163. © 2014 ArmstrongTeasdaleLLP Addressing Emerging & Developing Issues: Drug and Alcohol Testing  The EEOC contends that a company’s random alcohol testing of probationary employees violates the ADA’s medical testing provisions, arguing that a company is permitted to administer alcohol testing only when it has “a genuine and reasonable belief based on objective evidence that an employee is impaired by alcohol.”  Section 102(d) of Title I of the ADA prohibits employers from using medical testing or making inquiries as to whether an employee is disabled, or as to the severity of the disability, “unless such examination or inquiry is shown to be job- related and consistent with business necessity.”
  164. 164. © 2014 ArmstrongTeasdaleLLP The EEOC has challenged allegedly discriminatory tests and qualification standards.  The EEOC has scrutinized employers’ use of personality tests in hiring on the theory that such tests “tend to screen out” those who suffer from certain disabilities.
  165. 165. © 2014 ArmstrongTeasdaleLLP Addressing Emerging & Developing Issues: Unpaid Leave as a Reasonable Accommodation  In EEOC v. Verizon the EEOC argued that Verizon’s attendance policy violated the ADA because it allegedly disciplined employees for absences including those related to a disability. In the EEOC’s words, this policy amounted to a “no fault” leave policy  Similarly, in EEOC v. Denny’s, Inc., the EEOC sued Denny’s for enforcing a six-month maximum medical leave policy.  The EEOC currently concedes that employers need not grant requests for indefinite leave.
  166. 166. © 2014 ArmstrongTeasdaleLLP Addressing Emerging & Developing Issues: Unpaid Leave as a Reasonable Accommodation  In EEOC v. Interstate DistributorCo., the EEOC brought suit on behalf of hundreds of Interstate employees, alleging that the company denied them reasonable accommodations and then fired them pursuant to its unlawful maximum leave policy.  The EEOC claimed that the employer violated the ADA because it allegedly terminated its employees if they requested more than 12 weeks of leave instead of attempting to determine whether it would be reasonable to provide additional leave as an accommodation.
  167. 167. © 2014 ArmstrongTeasdaleLLP Addressing Emerging& Developing Issues: EEOC’s Guidance on CaregivingResponsibilities Reflects An IncreasinglyAggressivePosition  In 2007, the EEOC issued enforcement guidance entitled “Unlawful Disparate Treatment of Workers with Caregiving Responsibilities”  “Although the federal EEO laws do not prohibit discrimination against caregivers per se,” it states that “there are circumstances in which discrimination against caregivers might constitute unlawful disparate treatment.”
  168. 168. © 2014 ArmstrongTeasdaleLLP Addressing Emerging& Developing Issues: EEOC’s Guidance on CaregivingResponsibilities Reflects An IncreasinglyAggressivePosition  In 2009, the EEOC issued its “Employer Best Practices for Workers with Caregiving Responsibilities.”  The Caregiving Best Practices acknowledges that it is providing examples of practices that “go beyond federal nondiscrimination requirements and that are designed to remove barriers to equal employment opportunity.”
  169. 169. © 2014 ArmstrongTeasdaleLLP Addressing Emerging& Developing Issues: EEOC’s Guidance on CaregivingResponsibilities Reflects An IncreasinglyAggressivePosition  The Commission hosted a public hearing on February 15, 2012 about “Unlawful Discrimination Against Pregnant Workers and Workers with Caregiving Responsibilities.”
  170. 170. © 2014 ArmstrongTeasdaleLLP Addressing Emerging& Developing Issues: EEOC’s Guidance on CaregivingResponsibilities Reflects An IncreasinglyAggressivePosition  In EEOC v. CTI Global Solutions, in which the EEOC complained that CTI fired three female employees because of their pregnancies. Allegedly, CTI’s CFO told one of the employees that her job would be a “risk” for her because of her pregnancy (and she could not submit medical documentation evincing otherwise); a manager told another employee that her job would be unsafe for her while pregnant; and another manager told the third employee that, based on “past experiences,” it “would not be fair” for her to keep her assignment.  The court granted summary judgment for the EEOC on two of the women’s claims because there was direct evidence of discrimination
  171. 171. © 2014 ArmstrongTeasdaleLLP Addressing Emerging and Developing Issues: Emerging ADA & GINA Issues  EEOC v. Fabricut – The EEOC’s first lawsuit alleging genetic discrimination under GINA • The EEOC alleged the fabric distributor violated GINA and the ADA by unlawfully asking a job applicant for her family medical history in a pre-employment, post-job offer medical examination. The EEOC alleged further that the offer was rescinded based on the belief that the employee had carpal tunnel syndrome.
  172. 172. © 2014 ArmstrongTeasdaleLLP Addressing Emerging and Developing Issues: Emerging LGBT Issues  Macy v. Department of Justice  Complainant is a transgender woman  The EEOC held that claims of discrimination based on transgender status, also referred to as claims of discrimination based on gender identity, are cognizable under Title VII’s sex discrimination prohibition and therefore may be processed under EEOC’s federal sector and EEO complaints process.
  173. 173. © 2014 ArmstrongTeasdaleLLP Employer Best Practices  Be aware of your legal obligations under the ADA, ADAAA and PDA;  Train managers and staff that will encounter these issues;  Develop, disseminate and enforce a strong EEO policy.
  174. 174. © 2014 ArmstrongTeasdaleLLP Contact Dione C. Greene 816.221.3420
  175. 175. © 2014 ArmstrongTeasdaleLLP General Question & Answer Period  For the remainder of the morning, questions will be taken regarding any employment law topic.
  176. 176. © 2014 ArmstrongTeasdaleLLP