LaborSphere, Author at Laborsphere

Supreme Court Ducks Mootness Question In Genesis

Does an unaccepted offer of judgment for full relief made prior to a motion to certify moot the plaintiff’s claim in an FLSA collective action? That was the question we hoped the Supreme Court would answer in Genesis Healthcare Corp. v. Symczyk. Unfortunately, the majority in the 5-4 opinion issued April 16 refused to decide that question, finding that the issue was not properly before the Court because the plaintiff had conceded her claim was moot in the district court and Third Circuit, and had not contested the issue in her opposition to the petition for certiorari. While we now know from the dissent that Justices Kagan, Breyer, Sotomayor and Ginsburg would find that an unaccepted offer of judgment has no impact on the validity of the underlying claim, the majority opinion leaves unresolved a split among the Circuits. The Seventh Circuit accepts the argument that a claim must be dismissed as moot when an offer of judgment for full relief is made prior to a motion to certify, while the Third, Fifth and Ninth Circuits allow plaintiffs to circumvent mootness by immediately filing a motion to certify (the Second and Sixth Circuits accept mootness but reject the argument that the case should be dismissed, finding instead that judgment should be entered for the plaintiff in the amount offered by the defendant). Because the issue remains in doubt, Defendants in FLSA collective actions may prefer to pursue settlement with the individual plaintiff before a motion to certify has been filed to end the claim, rather than make an offer of judgment, in order to avoid endless litigation over the impact of the offer.

To read our client alert for this case click here.

EEOC Warns Employers Against Domestic Violence Discrimination

In its recent guidance titled “Questions and Answers: The Application of Title VII and the ADA to Applicants or Employees Who Experience Domestic or Dating Violence, Sexual Assault, or Stalking,” the EEOC cautions employers against unwittingly violating Title VII and the ADA in addressing employment-related issues involving victims of domestic violence.

The EEOC reminds employers that while Federal law does not expressly protect domestic violence victims from employment discrimination, such victims may still be entitled to protection under federal employment discrimination laws.

In its guidance, the EEOC provides examples of situations where employers may violate Title VII by engaging in disparate treatment, or applying sex-based stereotypes to victims of domestic violence. For example, an employer that terminates an employee victimized by domestic violence due to fear of the potential “drama battered women bring to the workplace” may engage in discrimination based on sex in violation of federal law.

The EEOC further warns employers to exercise caution before transferring or discharging domestic violence victims based on general concerns that they may pose greater workplace safety risks. Instead, employers should seek alternate resolutions before taking adverse action, such as paying for workplace security or getting a temporary restraining order. Even if such options are not effective, an employer should take adverse action against an employee only based on specific and concrete facts showing that the employee poses a threat to other employees.

Further, the EEOC guidance highlights situations in which an employer may violate the Americans with Disabilities Act (“ADA”) in treating employees and applicants adversely based on actual or perceived impairments resulting from domestic or dating violence. An example of this includes refusing to hire a domestic violence victim “based on a concern that she may require future time off for continuing symptoms or further treatment of depression.” The ADA may also require an employer to provide employees reasonable accommodations; such as where a victim of sexual assault requests unpaid leave to get treatment for depression and anxiety, but has no accrued sick leave and is not covered by the Family and Medical Leave Act. In certain situations the employer may have to modify its leave and attendance policies to accommodate the leave request, or risk violating the employee’s rights under the ADA.

Many of the scenarios discussed in the EEOC’s Q&A’s are straightforward and may surprise few employers. Yet the guidance highlights the agency’s interest in protecting victims of domestic violence, and signals to employers that the EEOC will be paying close attention to these issues. Finally, while Federal law offers limited protection to domestic violence victims, a handful of States have specific laws either directly protecting victims of domestic violence from employment discrimination, or requiring employers to give employees time off to attend court proceedings, obtain protective orders and/or seek services for the effects of domestic violence. Employers are well advised to consult the laws of their individual States and otherwise tread lightly when dealing with victims of domestic violence.

The DOL’s Made Some Changes to the FMLA; Is Your Policy in Compliance?

Effective March 8, 2013, the Department of Labor (“DOL”) began enforcing a new Final Rule for interpreting the Family and Medical Leave Act of 1993 (“FMLA”). The DOL’s new Final Rule (published February 6, 2013) makes effective expanded military caregiver and qualifying exigency leave rights created by the National Defense Authorization Act of 2010. The Final Rule also incorporates an hours of service eligibility requirement created by the Airline Flight Crew Technical Corrections Act of 2009, a federal law which modified FMLA eligibility requirements for airline flight attendants and flight crew members, who largely had been excluded from protected leave due to their unconventional work schedules,

The bulk of the DOL’s Final Rule clarifies military qualifying exigency and service member caregiver leave. Significant changes to the FMLA regulations resulting from the Final Rule include the following:

Extension of Military Caregiver Rights to Veterans: The Final Rule implements statutory amendments to the FMLA that extend military caregiver rights to family members of veterans with serious injuries or illnesses. Specifically, the regulations define a covered veteran as a member of the Armed Forces who has been discharged or released under conditions other than dishonorable within five years prior to the date the employee’s leave. The Final Rule adopts a flexible definition of a serious “injury or illness” for purposes of veteran military caregiver leave coverage. Additionally, the Final Rule expands the definition of serious injury or illness for current service members to include preexisting conditions aggravated by service in the line of active duty.

Expansion of Qualifying Exigency Leave: The DOL’s Final Rule extends qualifying exigency leave to eligible employees who are family members of military personnel of the Regular Armed Forces that are deployed to a foreign country. The DOL Final Rule also expands qualifying exigency leave to add a “parental care” category. Under this new category, an eligible employee may take qualifying exigency leave to care for a service member’s parent, who is incapable of self-care, in order for the eligible employee to:

arrange for alternative care;
provide care on an urgent, immediate need basis (but not on a routine, regular or everyday basis);
admit or transfer the parent to a care facility; or
attend meetings with staff at a care facility (but not for routine or regular meetings).

The need to provide parental care must arise directly out of the military member’s active duty status. Additionally, under the DOL’s new regulations, eligible employees now may take up to fifteen (15) days, instead of five (5), for qualifying exigency leave related to their rest and recuperation.

Clarification of Leave Certification Process: Prior FMLA regulations allowed certification of a service member’s serious injury or illness to be obtained only from representatives of the Departments of Defense or Veterans Affairs. Other health care providers were excluded from certifying a service member’s serious injury or illness. Under new FMLA regulations, any health care provider, even those unaffiliated with the Department of Defense, Department of Veterans Affairs or TRICARE, may provide required certification for an eligible employee to take military caregiver leave.

New FMLA Poster and Certification Forms: The Final Rule approves a revised FMLA Employer Rights and Responsibilities poster and new certification forms for FMLA leave, including a new form for military caregiver leave to care for veterans. The FMLA poster and certification forms, which are available on the DOL’s website, have been revised and updated to incorporate the new language of the FMLA regulations.

In light of these significant changes to FMLA regulations, employers need to revise their current FMLA policies and replace outdated posters and certification forms to bring them into compliance. Employers can also expect an uptick in the number of employees requesting military–related FMLA leave, as the DOL’s new regulations have expanded existing leave rights to cover a greater number of eligible employees.

California Court of Appeal Finds Employment Arbitration Agreement Barring Class Claims Unconscionable

In Compton v. Superior Court of Los Angeles County, No. B236669 (2d Dist. Mar. 19, 2013), a divided panel of the Second District Court of Appeal reversed the Los Angeles Superior Court’s order compelling arbitration of her wage-and-hour class action complaint.

The Compton majority found the arbitration provision was substantively unconscionable because it was “unfairly one-sided” for four reasons. First, the agreement exempted the employer from arbitration for injunctive relief on claims related to confidential information and trade secrets. The majority did not find the carve-out of plaintiff’s claims for workers compensation, unemployment and disability claims sufficient to create parity. Second, the majority found the imposition of a one-year time limit to arbitrate employee claims impermissibly shortened the applicable statutes of limitations; for a separate, but related reason, the court found this limitation was unfairly one-sided when compared with the three- and four-year statutes of limitation applicable to the unfair competition and trade secret claims preserved by the employer. Finally, the majority found that the attorneys’ fees language undermined the employee-favorable statutory fee provisions. Of some concern, the court declined to sever the offensive terms, finding the agreement to be “permeated by unconscionability.”

In an apparent effort to distance its opinion from AT&T Mobility, LLC v. Concepcion (2011) 131 S.Ct. 1740 and its progeny, the Compton majority emphasized that the Concepcion opinion arose out of a consumer arbitration agreement. The court specifically found that Concepcion “did not abrogate the Armendariz one-sidedness rule,” i.e., “the doctrine of unconscionability limits the extent to which a stronger party may, through a contract of adhesion, impose the arbitration forum on the weaker party without accepting that forum for itself.” Armendariz v. Foundation Health Psychcare Servs. (2000) 24 Cal.4th 83, 118.

The Compton court found that the agreement was also procedurally unconscionable because, regardless of “how conspicuous the arbitration agreement’s terms and advisements,” the employer’s reported conduct (hurried presentation and signature requested) “rendered them nearly meaningless” and demonstrated oppression. The court also found that the information provided was one-sided because it did not sufficiently set forth the rights that were being waived, and because the rules of the applicable arbitration bodies were not provided to the employees in toto.

As a procedural side note, the panel was divided even on the basis for consideration of the appeal. The dissent found that the appeal was appropriate pursuant to the “death knell” doctrine, and the majority side-stepped the issue by addressing the issue as a petition for writ of mandate.

The dissent raises a host of issues and highlights the unsettled conflicts between the Concepcion line of cases and California’s unconscionability principles, which have arisen primarily in the context of employee and consumer lawsuits.

Given the strong language in Compton and the court’s refusal to strike out the offensive terms, California employers may wish to engage in a review of their arbitration agreements in light of the Compton majority’s opinion.

Editor’s Update:

On June 12, 2013, the Supreme Court granted defendant’s petition for review, but deferred all briefing and further action in the matter pending its disposition of Sanchez v. Valencia Holding Co., S199119, the leading case on the related issue of whether the Federal Arbitration Act, as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___, 131 S.Ct. 1740, preempt state laws invalidating mandatory arbitration provisions in a consumer contract on grounds of procedural and substantive unconscionability.

NLRB Acting General Counsel Gets One Right

The NLRB’s Acting General Counsel has finally recognized that employees do not read every employer policy through a Section 7 lens. In a Memorandum from the General Counsel’s Division of Advice dated February 28, 2013, the Acting GC found that Boeing Company did not interfere with or restrain Section 7 activity by maintaining an ethics policy Code of Conduct which prohibits employees from questioning the company’s honesty, morality or reputation. Instead, the Memorandum concludes that reasonable employees would understand that the company’s Ethical Guidelines are aimed at matters of business ethics, not protected concerted activity.

While recent Board decisions give lip service to the requirements that phrases not be read in isolation, and that policies are unlawful only if employees “would reasonably construe” them as prohibiting Section 7 activity, all too often the opinions read as if the analysis was simply an academic exercise for labor lawyers to decide if the language could be construed as interfering with protected rights irrespective of the context in which they are found. Refreshingly, that is not the case in the Boeing Company Memorandum.

Boeing’s Ethical Guidelines is a forty-three page statement of the company’s business ethics, and sets forth the policies and standards by which the company and its employees are expected to conduct themselves as a government contractor. In the one-page Code of Conduct preamble, the company sets forth its own expectation for conducting business with highest standard of ethics and integrity, and mandates that employees meet that standard: “Employees will not engage in conduct or activity that may raise questions as to the company’s honesty, impartiality, reputation or otherwise cause embarrassment to the company.” The preamble Code of Conduct does not contain any limiting disclaimers or clarifying examples to explain that it is not intended to interfere with or restrict Section 7 rights. Nevertheless, the Acting GC determined that employees would understand that the Code does not interfere with their rights because the “broader framework” of the forty-three page Guidelines contains examples of the type of conduct – such as bribery or insider trading – that would undermine the company’s reputation for integrity. In other words, context matters even where the context requires reading the policy as a whole, and even where there are no clarifying examples or disclaimers connected with the prohibitions at issue. We can only hope the Acting General Counsel continues to apply the rule that policy statements should not be read in isolation, and continues to recognize that employees “would reasonably” understand the context in which prohibitions are contained.

Noel Canning: Where do we go from here?

The U.S. Court of Appeals for the D.C. Circuit determined last week in Noel Canning v. NLRB that the recess appointments of Board Members Flynn, Block and Griffin were unconstitutional because the Senate was not technically in “recess” when they were appointed in January 2012. That decision does not mean – as some have insisted – that the Board must stop all proceedings until new members are confirmed. Quite the contrary.

With respect to internal Board proceedings, the decision will have no impact on the work of either the General Counsel’s Office or the Regional Offices in conducting investigations or issuing complaints. Indeed, we should fully expect the Acting General Counsel to continue to pursue his ambitious and controversial agenda.

As recently made clear by Board Chairman Mark Gaston Pearce, the Board takes the view that the D.C. Circuit opinion applies only to invalidate the specific decision in the Noel Canning case, and it has historically viewed circuit court opinions as non-binding beyond the specific case at issue. Accordingly, the NLRB, as constituted, will continue to issue decisions until the recess appointment question is resolved by the Supreme Court. In this regard, the D.C. Circuit opinion is already in conflict with an earlier decision of the Eleventh Circuit in Evans v. Stephens, and the issue has been raised in more than a dozen cases pending review in other circuits. The validity of recess appointments will be raised first at the February 5 oral argument before the Fifth Circuit in D.R. Horton v. NLRB, which concerns the similar recess appointment of Former Member Becker in 2010, and then again in March when the question concerning the appointments of Members Block and Griffin will be addressed at oral argument before the Third Circuit in New Vista Nursing and Rehabilitation v. NLRB.　 Other cases are pending throughout the circuits.

Nevertheless, the appeal process may take longer than expected because the recess appointment question may not be addressed in some or all of the cases pending on appeal. That is because of the established principle of constitutional law that a court will not consider a constitutional challenge if the case can be disposed of on other grounds. So, for example, the Fifth Circuit will not address the constitutional question in D.R. Horton unless it first determines that the Board was correct in deciding that class action waivers in arbitration agreements violate Section 8(a)(1) of the Act. If, as anticipated, the Fifth Circuit rejects the Board’s legal analysis, it will have no reason to address the challenge to the recess appointments. The same will hold true going forward with respect to many of the highly controversial Board decisions issued in the last year which are pending review in the circuit courts.

Even though the recess appointment issue has apparently been resolved in the D.C. Circuit, the future of cases pending there remains unclear. First, the Board has until March 11 to file a petition for rehearing in banc, or until late April to file a petition for certiorari to the Supreme Court. In the interim, the Circuit Court issued an order holding many of its the pending NLRB cases – including the appeal of the Banner Health decision – in abeyance for the foreseeable future. That order may have a substantial impact on the appeals process inasmuch as Section 10(f) of the Act permits any aggrieved party to file an appeal in the D.C. Circuit irrespective of where the events in question took place. While employers would naturally want to appeal to the court that has already ruled that otherwise enforceable Board decisions involving Members Block and Griffin are invalid, doing so may result in their cases not being heard on any grounds until after the recess appointments issue has been resolved.