Monday, December 20, 2010

Ever Filed For Bankruptcy? Don't Put It On Your Resume.

On December 15, 2010, in the case of Rea v. Federated Investors, No.: 10-1440, the Third Circuit Court of Appeals held that the federal Bankruptcy Code does not prohibit a private employer from refusing to hire an applicant solely because that applicant had previously filed for bankruptcy.

The plaintiff in this case, Dean Rea, had filed for bankruptcy in 2002 and his debts were discharged in 2003. In 2009, Rea applied for employment with Federated Investors, a private company. After an interview, it initially appeared that Rea would be hired by Federated Investors. Rea was later informed, however, that Federated Investors had refused to hire him because he had previously been in bankruptcy.

Rea then filed suit, arguing that section 525(b) of the Bankruptcy Code (11 U.S.C. 525(b)) prohibited discrimination against an individual solely because he or she is or has been a debtor in bankruptcy. Specifically, section 525(b) directs, in pertinent part, that:

"No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankruptcy, solely because such debtor or bankrupt -- (1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act. . ."

The District Court dismissed Rea's case, holding that the language of Section 525(b), above, does not prohibit an employer from refusing to hire an applicant on the basis of a previous bankruptcy.

On appeal, the Third Circuit agreed, and affirmed the dismissal of Rea's case. Specifically, the Court looked at the language of Section 525(b) quoted above, which is directed to private employers, and compared it to the language set forth in Section 525(a), which is directed to governmental agencies. The Court noted that the texts of Sections 525(a) and 525(b) are nearly identical, but not completely. The Court noted that Section 525(a) provides that a governmental unit shall not "deny employment to, terminate the employment of, or discriminate with respect to employment against," a person that is or has been in bankruptcy, but that Section 525(b) lacks any such language concerning "denying employment to." The Third Circuit held that the omission of the phrase "deny employment to," by Congress in Section 525(b) was intentional, and effect must be given to this important difference. As such, the Court reasoned that by intentionally omitting the phrase "deny employment to," in Section 525(b), after having specifically included it in Section 525(a), Congress did not intend to prohibit a private employer from refusing to hire an applicant because of that applicant's previous or current bankruptcy.

You can view the Third Circuit's full opinion here: http://www.ca3.uscourts.gov/opinarch/101440p.pdf

Thursday, December 16, 2010

Eastern District of PA: ADA Claim For Failure To Provide Disabled Employee With A Cell Phone May Be Sent To A Jury

In the case of Boandl v. Geithner, No.: 09-4799 (E.D. Pa. 11/2/2010), the U.S. District Court for the Eastern District of Pennsylvania held that a jury was permitted to hear the claims of Richard Boandl, a disabled former IRS Revenue Agent, in which he alleged that the IRS had failed to engage in the interactive process required by the Rehabilitation Act and the Americans with Disabilities Act (ADA), when his immediate supervisory summarily denied his verbal request to provide him with a cell phone to assist him in the performance of his investigative duties.

At a young age, Boandl had been infected with polio, and as a result, has been disabled for most of his life. He has a severe limp, cannot stand for more than a few minutes at a time, and requires the use of a cane to walk short distances and a wheelchair to travel distances of more than twenty yards. Boandl had been employed as a Revenue Agent with the IRS from 1983 until 2004.

In late 2003, Boandl spoke to his immediate supervisor and requested that the IRS issue him a cell phone as a reasonable accommodation for his disability. Boandl alleged that he needed a cell phone to assist in his investigative duties, which required traveling outside his office to locate tax non-filers and visit witnesses. Boandl told his supervisor that because of his disability, it was difficult for him to repeatedly have to get in and out of his car, walk and stand while in the process of trying to locate, and then use, a working pay phone while out of the office. Boandl alleged that his supervisor immediately denied his request. Boandl then emailed a copy of his cell phone request to his supervisor on or about December 11, 2003. On January 20, 2004, Boandl's supervisor provided him with a written memorandum officially denying his request for a cell phone on the basis that the IRS did not issue cell phones to any employees holding Boandl's position, and that the ability to be able to return phone calls while in the field was not an essential function of Boandl's position.

In denying the government's subsequent Motion for Summary Judgment on this issue, the Court found that Boandl had produced sufficient evidence that would allow a jury to conclude that the IRS had failed to engage in the interactive process required by the Rehabilitation Act and the ADA because Boandl's supervisor had summarily denied his oral request for an accommodation. Moreover, the Court noted that the IRS' stated reason for denying Boandl' request, i.e., that the need to return phone calls while in the field was not an essential function of his position, was not the sole reason for Boandl's cell phone request. Rather, Boandl had specifically alleged that he had investigative duties while out of the office, such as locating non-tax filers and locating witnesses, which required the use of a cell phone. The Court held that because the government had failed to present any evidence that these tasks were not essential functions of Boandl's job, it was not entitled to summary judgment on this claim. Therefore, a dispute existed over whether the tasks identified by Boandl were essential functions of his position, which was required to be resolved by a jury.

The lesson that employers and HR specialists need to take away from this case is that summarily denying requests for accommodation under the ADA or the Rehabilitation Act is never good practice. Rather, each request, even if it may facially appear to not require an accommodation, should be given its due consideration and analysis. A summary denial of any request for accommodation, especially one that is made verbally, can leave an employer exposed to a claim for failure to engage in the required interactive process.

Western District of PA Dismisses Title VII and ADA Claims for Insufficient Facts

In the case of Robuck v. Mine Safety Appliances Co., No.: 2:10-cv-00763 (W.D. Pa. 11/3/2010), the U.S. District Court for the Western District of Pennsylvania dismissed claims of retaliation under Title VII and the ADA due to the employee's failure to plead sufficient factual allegations. While the arguments behind Robuck's claims here may have been admittedly weak from a plaintiff's perspective, this case serves as an important reminder of the importance that needs to be paid by a plaintiff's attorney to fact-pleading in the aftermath of the now infamous Twombly and Iqbal decisions.

The employee, Dennis Robuck, claimed to suffer from hypertension that required him to avoid stress and to take long walks on a regular basis, which he often did on his lunch break. He also alleged to have a problem with a female co-worker, Ruth Protzman, who apparently also took walks during her lunch break, as well. Robuck alleged that he made every attempt to avoid Ms. Protzman, and even the employer admitted that up until February of 2007, it had made every effort to keep Robuck and Ms. Protzman separated. One of the ways in which it did this was to allow Ms. Protzman to take her lunch hour at 11:30 AM, while Robuck took his lunch hour at 12:00 PM.

In February of 2007, however, the employer changed Robuck's lunch hour to 11:30 AM. Robuck alleged that the employer failed to accommodate him by changing his lunch hour back to 12:00 PM, despite his continuing complaints. Robuck also alleged that he had made numerous complaints to his supervisor, stating that the employer had given priority to Ms. Protzman over Robuck when attempting to separate them.

On October 29, 2007, Robuck was terminated by his employer, and subsequently received a letter from the employer indicating that had been discharged for willfully disregarding workplace rules.

Robuck subsequently filed suit, alleging that the reason given by the employer for his termination was pretextual, and that he was actually terminated for walking on a road on which the employer believed Ms. Protzman might also have been walking on at the same time. Robuck insisted, however, that Ms. Protzman was not even walking on the road at that time and that she was not even at work on the date of his alleged offense. Robuck alleged retaliation on the basis of sex in violation of Title VII, and retaliation in violation of the ADA.

The employer filed a motion to dismiss, arguing that Robuck had failed to allege sufficient facts to sustain claims of retaliation under either Title VII or the ADA. The District Court agreed, and dismissed both claims. With respect to Robuck's claim that he was treated less favorably by his employer than Ms. Protzman, the Court held that the only real facts alleged by Robuck in his Amended Complaint related to his ongoing dispute with Ms. Protzman and the employer's attempt to keep them apart, which was thwarted by a change in lunch schedule. However, the Court found that "[Robuck's] allegations are little more than generalized complaints of unfairness which do not and cannot constitute protected activity." While Robuck alleged that the employer "always gave priority," to Ms. Protzman, he failed to set forth any facts to "support his conclusory allegation that he complained of sex discrimination to his supervisor or anyone else." Moreover, the Court recognized that "[Robuck's] Amended Complaint is similarly vague in that [the employer's] alleged favoritism towards Ms. Protzman could have been motivated by any number of factors which are not protected under Title VII."

With respect to Robuck's ADA retaliation claim, the Court noted that while "[Robuck] alleges that [the employer] has discriminated against him as a result of his previous complaints of discrimination based on [his] disability . . . [Robuck] . . . provides no indication that he ever mentioned his disability during his discussion with his supervisor . . . or anyone else. Therefore, [Robuck] did not explicitly or implicitly plead that his alleged disability was the reason for the unfairness in which he complains. Accordingly, such complaint does not constitute 'protected activity' to constitute a prima facie case of retaliation." Therefore, the Court dismissed Robuck's ADA claim as well.

Had more care been taken by Robuck's counsel in drafting the Amended Complaint in this case, so as to include more specific facts, circumstances and events, it is possible that the Court would not have dismissed it at a 12(b)(6) stage. At the very least, getting past the pleadings and into active discovery may have allowed Robuck to garner some leverage in which to settle the case. But, a sloppy and imprecise Amended Complaint here served no other purpose but to get Robuck's Title VII and ADA retaliation claims dismissed at the outset. It should also be noted that Robuck received no sympathy from the Court with respect to his request to be allowed to file a Second Amended Complaint to correct these deficiencies. As of the date of the Order dismissing these claims, the Court noted that this case had been in litigation for nearly three years. Given that length of time, the Court held that "[Robuck] and his counsel have had ample time and the necessary means to secure and plead facts to support his claims," and as such, allowing Robuck the opportunity to file a Second Amended Complaint would be, in the Court's own words, "futile."

The lesson is clear - pay close and careful attention to your factual pleadings. The more, the better.

Wednesday, November 24, 2010

PA Supreme Court: In-Home Nurses Entitled To Overtime Pay

On November 17, 2010, in the case of Bayada Nurses, Inc. v. Commonwealth of Pennsylvania Dept. of Labor and Industry, No.: 67 MAP 2008, the Pennsylvania Supreme Court held that under the Pennsylvania Minimum Wage Act of 1968 (PMWA), an employer that provides in-home nursing care to individuals is not exempt from paying its nurses overtime pay under the "domestic services," exemption to the PMWA.

The general rule under the PMWA is that an employer in Pennsylvania must pay its employees a minimum wage plus overtime for hours worked in excess of 40 hours per week. However, the PMWA provides for a number of exemptions to this general rule, including the "domestic services exemption," found at 43 P.S. section 333.105(a)(2). This section provides that a Pennsylvania employer is exempt from the minimum wage and overtime provisions of the PMWA for "domestic services in or about the private home of the employer." A subsequent regulation promulgated by the Pennsylvania Department of Labor and Industry interpreting this statutory provision defined "domestic services" as "work in or about a private dwelling for an employer in his capacity as a householder, as distinguished from work in or about a private dwelling for such employer in the employer's pursuit of a trade, occupation, profession, enterprise or vocation." 34 Pa. Code section 231.1(b). In other words, under the Department's regulation, the only employers who qualify for the "domestic services" exemption to the PMWA are those that employ individuals for work in or about a private dwelling that the employer itself owns or possesses. In other words, according to the Department, work sought to be exempted has to be performed for an employer in his or her capacity as a householder.

In this instance, the Department notified Bayada Nurses, Inc., that it would be performing a wage and overtime audit. Bayada Nurses, Inc., is a Pennsylvania corporation that offers nursing care, personal care, physical therapy and rehabilitation to pediatric, adult and geriatric clients. Bayada employs licensed nurses, registered nurses and home health care aides. Bayada paid its home health care aides an hourly wage, with each hour of service billed to the client. Bayada did not, however, pay those aides overtime. Upon being notified of a potential audit by the Department, Bayada filed a petition seeking a declaration that: (1) challenged the validity of the Department's regulation as improperly limiting the scope of the domestic services exemption; (2) Bayada's clients were "employers" for purposes of the PMWA, such that Bayada and its clients could both take advantage of the domestic services exemption; and (3) the domestic services exemption of the PMWA should be interpreted consistently with the exemptions of the federal Fair Labor Standards Act (FLSA).

The Supreme Court rejected all of Bayada's arguments, and held that: (1) the Department's regulation interpreting the term "domestic services" to exclude those employers who are not householders themselves was consistent with the plain statutory language of the PMWA; (2) Bayada was not entitled to take advantage of the domestic services exemption because in providing aides to clients, Bayada was not a "householder" employer; and (3) the domestic services exemption should not be read consistently with the FLSA because the FLSA sets a federal "floor" for minimum wage and overtime requirements, and states are free to adopt more restrictive (i.e., more employee-friendly) laws and requirements. Since the domestic services exemption to the PMWA, as interpreted by the Department, is more restrictive and employee-friendly than the exemptions set forth in the FLSA, consistency of interpretation was not warranted, and the PMWA domestic services exemption was not pre-empted by federal law. In upholding the reasonableness of the Department's regulation in the first issue, the Supreme Court held that the Department's regulation of "domestic services," which limited the exemption to only those employers who are "householders," was not inconsistent with the plain language of the PMWA, in that "the unambiguous language [of the domestic services exemption] in the statute focuses on one type of employer - a householder."

The impact of this decision will extend well beyond the facts and circumstances of this case. In upholding the Department's application of the domestic services exemption to only those instances where an employee is performing work for his/her employer in the employer's capacity as a "householders," the Pennsylvania Supreme Court sanctioned a rather bright-line rule. Going forward, it would seem that every business in Pennsylvania that provides some manner of "work in or about a private dwelling," will now required to pay its employees overtime for hours worked in excess of 40 per week, unless that employer also owns the private dwelling where the work is being performed. And, given the Department's rather broad definition of "domestic services," as encompassing "all work in or about a private dwelling," this rule would apparently also extend to professions such as landscapers, maids, and cleaning services, and perhaps even to electricians, plumbers, painters, and the like. Therefore, employers in these types of businesses in Pennsylvania who may have been relying upon the "domestic services" exemption to justify a non-payment of overtime to hourly wage workers, need to take another look at their books.

You can read the Pennsylvania Supreme Court's full Opinion here: http://www.courts.state.pa.us/OpPosting/Supreme/out/J-105-2009mo.pdf

Wednesday, November 17, 2010

Friday, November 12, 2010

FMLA Insights: GINA Rules Require New Disclosures In Requests For FMLA Certification

This is a helpful article posted by "FMLA Insights" on the new GINA regulations that become effective January 10, 2011, which require employers seeking medical certifications in support of leave or accommodation requests to provide new disclosures. GINA Rules Require New Disclosures In Requests For FMLA Certification

Tuesday, November 9, 2010

Classifying Construction Workers as Independent Contractors Will Soon Become More Difficult In Pennsylvania

On October 13, 2010, Pennsylvania Governor Ed Rendell signed into law House Bill 400 of 2009, otherwise known as the new "Construction Workplace Misclassification Act." This Act sets forth specific criteria that now must be met before individuals employed in the construction industry in Pennsylvania may be classified as "independent contractors" for purposes of workers' compensation and unemployment compensation.

Specifically, an individual who works in the construction industry can only be classified as an "independent contractor" for purposes of workers' compensation and unemployment compensation where the following three conditions are met:

(1) the individual must have a written contract to perform those services

(2) the individual must be free from control or direction over the performance of such service both in the written contract and in fact; and

(3) the individual must be customarily engaged in an independently established trade, occupation, profession or business.

The Act subsequently sets forth a detailed list of multiple factors that must be met before an individual can meet the third prong of the above test, i.e., the "customarily engaged in an independently established trade," prong.

Additionally, the Act provides that an employer's failure to withhold federal or state income taxes or failure to pay unemployment compensation contributions or workers' compensation contributions with respect to an individual's pay shall not be considered a factor in determining whether an individual is an employee for purposes of workers' compensation or unemployment compensation.

An employer who fails to appropriately classify an individual as an employee under this Act faces an array of possible penalties, ranging from a criminal misdemeanor charge for an intentional violation, to a $1,000.00 summary offense, or administrative enforcement, which can entail significant fines and the issuance of a stop-work order for a construction site.

The Act also prohibits an employer from retaliating against any individual for exercising his/her rights under the Act, and creates a "rebuttable presumption" of retaliation when any "adverse action," is taken against an individual within 90 days of that person's exercise of rights under the Act.

While the Act appears to create a private right of action for an individual to report an employer's non-compliance with the Act (individuals who suspect non-compliance are authorized to file a complaint), there is no provision that allows for the collection of monetary damages, costs, or attorneys' fees. However, the Act does provide that if any individual alleges noncompliance by an employer, and does so in good faith, then that individual "shall be afforded the rights provided by this Act, notwithstanding the person's failure to prevail on the merits."

The Construction Workplace Misclassification Act becomes effective on February 13, 2011. All businesses in Pennsylvania engaged in the construction industry that have individuals working for them need to review their current employee/independent contractor classifications in order to ensure compliance with these new rules before the effective date.

You can read the final version of the Construction Workplace Misclassification Act here: http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2009&sessInd=0&billBody=H&billTyp=B&billNbr=0400&pn=4289 (the sections that are not lined-out are the provisions of the bill that have been signed into law).

Tuesday, October 26, 2010

Federal Court Allows Age and Gender Discrimination Claims Against Rite-Aid To Proceed

In Lazzaro v. Rite Aid Corporation, 09-cv-1140 (W.D. Pa. 8/17/2010), the U.S. District Court for the Western District of Pennsylvania permitted age and gender discrimination claims filed against Rite Aid Corporation under the Age Discrimination in Employment Act (ADEA), Title VII and the Pennsylvania Human Relations Act (PHRA), to proceed to trial.

Plaintiff, Joann Lazzaro, a 55 year old female, had worked for Rite Aid and its predecessor companies for thirty-six years, beginning on June 20, 1972. She began her career with Brooks/Eckerd stores, and transitioned to Rite Aid after Rite Aid acquired Brooks/Eckerd. After her Brooks/Eckerd store was closed in October of 2007, Lazzaro was transferred as Store Manager to a Rite Aid store located in Wilkinsburg, PA.

In February of 2008, Jeff Suriano, a 37 year old male, became Lazzaro's supervisor when he was made the Rite-Aid District Manager responsible for the Wilkinsburg store. During his first visit to the Wilkinsburg store, Suriano stated to Lazzaro that he thought she was retiring, noting that she had worked there for 30 years. Lazzaro corrected him, noting that it would be thirty-six years in June. In turn, Suriano commented "that's almost as long as I have been born," and further mentioned that he "swore he heard that she was retiring," on at least two other subsequent occasions.

On March 24, 2008, five of Lazzaro's family members, none of whom were Rite Aid employees, assisted Lazzaro in the Wilkinsburg store by helping her prepare the store for its upcoming inventory. Lazzaro claimed that she told Suriano about this, who said he would "look the other way this time." Suriano, however, denied having any conversations with Lazzaro about her family members working at the Wilkinsburg store. On March 25, Suriano gave Lazzaro a "Written Notice" as a result of the Wilkinsburg store's poor inventory performance.

On May 5, 2008, Suriano and Lynne Shawley, Rite Aid's Human Resources Manager, met with Lazzaro to discuss the Wilkinburg store's poor inventory performance. At this meeting, Suriano raised the issue of Lazzaro's family members working in the Wilkinsburg store. Lazzaro admitted that she had her family members perform work at the Wilkingsburg store, but stated that Suriano knew that it was happening. Suriano again denied having any knowledge of Lazzaro's family members working at the Wilkinsburg store prior to March 24, 2008. During this meeting, Shawley also commented to Lazzaro that she had heard that Lazzaro was "always complaining about aches and pains," and that she "was very slow to catch on to the new Rite Aid system." At the close of the meeting, Shawley informed Lazzaro that an investigation would be conducted regarding the extent to which she permitted her family members to work at the Wilkinsburg store.

Later, at Shawley's request, Lazzaro provided a written statement that approximated the amount of time her family members had worked at the Wilkinsburg store. Shawley then suspended Lazzaro for her alleged misconduct, but did not suspend Suriano for his alleged knowledge of Lazzaro's family members working at the Wilkinsburg store.

On June 2, 2008, Shawley submitted a recommendation to the Senior Resources Manager for Rite Aid that Lazzaro be terminated. Subsequent discussions between and among upper-level Human Resources individuals and management for Rite Aid Corporation approved Shawley's recommendation. At Shawley's instruction, Suriano called Lazzaro on June 3, 2008 and informed her that she had been terminated.

Following Lazzaro's termination, Rite Aid transferred a 25-year-old male to fill the Store Manager position at the Wilkinsburg store that had been vacated by Lazzaro. During her previous thirty-six years of employment, Lazzaro had never received any disciplinary action or performance warnings from Rite Aid or its predecessors.

On November 21, 2008, Lazzaro filed an EEOC charge against Rite Aid, alleging age and gender discrimination. Following the filing of Lazzaro's EEOC charge, Rite-Aid terminated at least four other store mamagers, aged 45, 37, 55 and 47, for permitting individuals who were not Rite Aid employees to perform work at their respective stores. Rite Aid then replaced these terminated store managers with individuals who were aged 27, 24, 34 and 57.

In her subsequent lawsuit, Lazzaro claimed that her discipline and termination were discriminatory actions against her based upon her age and/or gender, and that Rite Aid's reasons for terminating her were mere pretext. Rite Aid filed a motion for summary judgment, arguing that it had legitimately and properly terminated Lazzaro for permitting non-employees to work at the Wilkinsburg store and that Lazzaro had failed to establish any evidence of discrimination.

The District Court denied Rite Aid's motion for summary judgment, and permitted Lazzaro's claims to proceed to a jury. Contrary to Rite Aid's assertions, the Court held that Lazzaro had submitted enough conflicting evidence that could allow a jury to determine that Rite Aid's proffered reasons for terminating Lazzaro were mere pretext. Specifically, the Court noted that: (1) during Suriano's first visit to the Wilkinsburg store, he had made comments about Lazzaro retiring and about her age; and (2) during the May 5, 2008 meeting, Shawley had made comments about Lazzaro complaining about aches and pains and being "slow to catch on to the new Rite Aid system." The Court also found that there existed a factual dispute as to whether or not Suriano actually knew that Lazzaro's family members were working at the Wilkinsburg store. The Court noted that the determination of this factual dispute could allow a jury to draw reasonable inferences as to whether Lazzaro's disparate treatment was meritorious, and could enable them determine whether Rite Aid treated Suriano, a younger male, differently than Lazzaro, an older female.

The Court also pointed to the fact that Lazzaro was the first store manager fired for allowing non-employee family members to work at her store. And, there was no evidence offered to establish that Rite Aid had a policy prohibiting non-employees from volunteering their services, nor any Rite-Aid policy that permitted immediate termination for allowing such an activity.

Ultimately, the Court concluded that it was the jury's job to determine whether Rite Aid was using terminations for violations of an unwritten company policy as pretext, thus promoting the inference that a pattern of terminations existed where older store managers were being replaced with younger ones. Put another way, "[s]imply providing the Court with evidence that defendant has terminated other store managers for the same reason as [Lazzaro] in no way legitimizes a pattern of termination that a reasonable fact-finder may otherwise conclude is pretext."

Monday, October 25, 2010

Third Circuit: Employer Who Fired Workers For Poor Performance While Allegedly Engaging In Discriminatory Training Methods May Be Liable For Discrimination

In Grassmyer, et al. v. Shred-It USA, Inc., No.: 09-3876 (3d. Cir. 8/25/2010), the Third Circuit Court of Appeals held that in a sex discrimination claim under Title VII, a plaintiff can rebut an employer's allegedly nondiscriminatory reason for terminating the plaintiff due to poor performance, by setting forth evidence that the employer failed to provide plaintiff the same training and assistance opportunities available to other employees of the opposite sex.

In Grassmyer, three plaintiffs, all female, sued their former employer, Shred-It USA, Inc., claiming that Shred-It illegally discriminated against them on the basis of their sex, in violation of Title VII. Two of the plaintiffs had been fired by Shred-It for failing to meet specifically designated monthly sales quotas. The third plaintiff resigned claiming that she had been constructively discharged. All three plaintiffs admitted that they had failed to perform the minimum monthly sales quotas required of them. Nevertheless, the plaintiffs claimed that Shred-It had discriminated against them when it: (1) did not terminate male sales representatives who were performing comparably or worse than the plaintiffs; (2) applied sales quotas unevenly among male and female sales representatives; and (3) discriminated on the basis of sex in matters such as training, territory assignments and performance requirements.

The trial court dismissed plaintiffs' claims, finding that over the five previous years, Shred-It had terminated seven male sales representatives and only four female sales representatives, and this fact would thus prevent any rational jury from finding that plaintiffs were terminated because of their gender. The trial court also found that plaintiffs' allegations of discrimination with respect to the allocation of sales territories was not actionable due to the undisputed fact that the plaintiffs were unable to meet their sales quotas, and also concluded that the plaintiffs failed to present any evidence whatsoever that the actions by Shred-It with respect to training opportunities "occurred because of invidious gender discrimination."

On appeal, the Third Circuit reversed the trial court's ruling that plaintiffs had failed to set forth a viable sex discrimination claim against Shred-It. Specifically, the Court recognized that the plaintiffs had introduced testimony that conflicted with the evidence set forth by Shred-It as to how training programs and opportunities were provided and how sales territories were assigned. The Third Circuit held that Shred-It's reason for terminating two of the plaintiffs - failure to meet their minimum required sales quotas - did not automatically become legitimate and non-discriminatory simply because plaintiffs' performance failure was undisputed. Rather, the plaintiffs had introduced sufficient evidence to allow a jury to conclude that the reason why plaintiffs had failed to meet their required sales quotas was because they were improperly denied training opportunities and superior sales territories that were provided by Shred-It to its similarly situated male employees. The Court reaffirmed the rule that an employer who discriminates on the basis of a protected class by failing to provide an employee with sufficient training, cannot then automatically escape liability under Title VII by subsequently terminating that employee for poor performance.

The Court also rejected the trial court's reliance upon Shred-It's past termination record of both male and female sales representatives, noting that "Shred-It's past employment statistics say nothing about the training and territory allocations of the male and female sales representatives who were terminated over the last five years or whether Shred-It otherwise discriminated against women in ways that affected their ability to meet the sales quotas, as is alleged here." Furthermore, the Court recognized that even if Shred-It's past employment statistics conclusively demonstrate no past discrimination of women, that would not immunize Shred-It from all present and future claims of discrimination.

The Third Circuit's full opinion in Grassmyer may be read here: http://www.ca3.uscourts.gov/opinarch/093876np.pdf

Federal Court Dismisses ADA and FMLA Claims Against Wal-Mart

On August 26, 2010, in the case of Stoppi v. Wal-Mart Transportation, LLC, No.: 3:09-cv-916 (M.D. Pa. 2010), District Judge James M. Munley dismissed plaintiff's claims of employment discrimination and harassment against Wal-Mart Transportation under the Americans with Disabilities Act (ADA), but allowed plaintiff's claims of retaliation under the ADA and Family Medical Leave Act (FMLA) to proceed.

Plaintiff, Kimberly Stoppi, was hired by Wal-Mart Transportation, LLC in 2006 as a Driver Coordinator/Router position. Stoppi had been diagnosed with bipolar disorder in her early thirties, but did not reveal her diagnosis to Wal-Mart at the time she was hired.

Prior to November of 2007, Stoppi spoke with her supervisor and asked to be seated away from a window while she adjusted her medication, because taking her medication weakened Stoppi's eyesight and made her hands unsteady. Stoppi testified that her supervisor refused this request and insisted that she perform one-hundred percent or take a leave of absence. Other supervisors repeated this instruction and Stoppi instead stopped taking her medication, and suffered as a result.

Wal-Mart granted Stoppi a leave of absence related to her medical condition in November 2007 until December 2007. When Stoppi returned to work in December of 2007, there was a vacancy in a management position in the facility. A Human Resources Manager for Wal-Mart told Stoppi of the position and asked her if she wanted to interview for the job. While Stoppi was allegedly enthusiastic about applying for the position, Wal-Mart chose not to grant Stoppi an interview. Stoppi contended that she was well-qualified for the position, had nearly five years of transportation experience, had trained new employees and was already in a management position. Stoppi also argued that the employees who did receive interviews lacked the experience in transportation that she had - one had worked for a bingo hall prior to working for Wal-Mart and another had worked in a dentist's office. Wal-Mart contended that Stoppi lacked recent supervisory or management experience, and that it exercised business judgment in choosing to interview other employees with more relevant experience. Ultimately, Wal-Mart did not fill the management position.

After her return to work in December of 2007, Stoppi also claimed that she had been subject to a hostile work environment because of her disability. Specifically, Stoppi referenced five incidents: (1) on December 27, 2007, a driver commented in the breakroom in front of Stoppi that workers can get a "mental leave" at Wal-Mart; (2) on January 13, 2008, another driver saw Stoppi crumple a piece of paper and asked if she was having a "bipolar moment"; (3) Stoppi had heard other workers talking about taking medications, "looney bins" and "going postal" around the workplace; (4) In November of 2008, a driver asked Stoppi if she had forgotten to "take her pill," and in December, the same driver told Stoppi "I see you took your prozac"; and (5) in March of 2008, Stoppi's coworker gave her a coffee mug with the character "Dopey" on it. Stoppi did not report all of these incidents to management or complain about inappropriate comments, as she felt that Wal-Mart would not remedy the situation. Stoppi did complain to one of her managers about the "Dopey" mug, who laughed when Stoppi complained. Stoppi also contended that Wal-Mart's Human Resources Department "leaked" the information concerning her illness to her supervisors.

Stoppi filed claims against Wal-Mart for (1) discrimination under the ADA, (2) harassment under the ADA, and (3) retaliation under the ADA and FMLA. Under her first claim, Stoppi alleged that Wal-Mart discriminated against her because of her disability when it refused to grant her an interview for a position for which she was clearly qualified. Under her second claim, Stoppi alleged that the various comments and actions by the drivers and coworkers set forth above created a hostile work environment that was detrimental to her. Finally, Stoppi claimed that Wal-Mart's failure to grant her an interview and promote her to the vacant management position constituted retaliation for her earlier requests for accommodation and her subsequent medical leave.

The Court granted Wal-Mart's motion for summary judgment on Stoppi's first two claims, and dismissed them. With respect to Stoppi's ADA discrimination claim, the Court held that Stoppi had failed to establish an adverse employment action necessary for a discrimination claim, because it was undisputed that Wal-Mart did not promote anyone. Relying upon a prior decision by the Third Circuit, which held that a plaintiff who did not receive a non-existent employment position could not establish a case of Title VII retaliation, the District Court held that since Wal-Mart had ultimately decided not to fill the vacant management position at all, any failure to grant Stoppi and interview cannot constitute an adverse employment action, as a matter of law.

With respect to Stoppi's claim for harassment under the ADA, the District Court held that while Stoppi may have considered the comments by the Wal-Mart employees to be "hostile," the conduct was not objectively severe enough for a jury to find the existence of a hostile environment. The incidents that Stoppi complained of amounted to an infrequent few over a two-year period, and Stoppi did not point to any evidence that this conduct unreasonably interfered with her job performance.

The District Court, however, permitted Stoppi's retaliation claims under the ADA and FMLA to proceed, holding that Stoppi's argument that the stated reasons for refusing to interview her for the vacant management position were mere pretext, could be accepted by a reasonable jury. Wal-Mart's claim was that Stoppi was denied an interview because she allegedly lacked recent supervisory experience, but Stoppi introduced evidence that those who actually were interviewed had less supervisory experience than she did. As such, the Court held that a jury could find that the stated reason for Wal-Mart's employment decision - Stoppi's lack of experience - was not the real reason. Thus, the Court permitted Stoppi's retaliation claim to proceed.

Tuesday, October 19, 2010

PA Superior Court: Restrictive Covenants Survive Purchase of Membership Equity Interests of LLC

In Missett v. HUB International Pennsylvania, Inc., 2010 PA Super 178 (9/23/2010), the Pennsylvania Superior Court held that when a Limited Liability Company (LLC) sells all of its membership equity interests to another business entity, a restrictive covenant (or covenant not to compete) that was previously entered into by an employee of the LLC, will survive without the need for specific assignment language in the restrictive covenant.

In HUB International, Christopher Missett became employed by Clair Odell Insurance Agency, LLC ("Clair Odell") as a salesperson in the company's benefits department. In this capacity, Missett originated business for Clair Odell, negotiated with potential clients and worked with existing clients to meet their coverage and services needs. In 2000, Missett entered into an agreement with Clair Odell that contained a non-solicitation clause, which prevented Missett from soliciting Clair Odell's clients or prospective clients for two years following the date of his termination.

In 2001, Citizens Financial Group ("Citizens") purchased the membership interests of Clair Odell, and changed the name of the company to Citizens Clair Insurance Company, LLC ("Citizens Clair"). In December of 2002, Missett entered into a second Agreement that amended and restated the original 2000 Agreement, and which contained the same confidentiality and non-solicitation provisions as the 2000 Agreement.

In 2006, HUB U.S. Holdings, Inc. ("HUB U.S.") entered into a Purchase and Sale Agreement with Citizens, in which it acquired all of the issued and outstanding membership equity interests of Citizens Clair. The name of the company was then changed to Hub International Pennsylvania, LLC ("HUB Pa"). The Purchase and Sale Agreement required the companies to abide by the terms of any existing employment agreements that were attached as exhibits. Missett's 2002 Agreement was specifically included as an exhibit to the Purchase and Sale Agreement.

Missett was terminated on April 29, 2008. The stated reason for his termination was that HUB Pa did not want to pay his high commission schedule.

Missett subsequently initiated litigation seeking to enjoin HUB Pa from enforcing the non-solicitation agreement and requesting a declaration from the court that his 2002 Agreement was unenforceable. Missett argued that pursuant to the Pennsylvania Supreme Court's decision in Hess v. Gebhard & Co., Inc., 808 A.2d 912 (Pa. 2002), a restrictive covenant not to compete that is contained in an employment agreement is not assignable to a purchasing business entity in the absence of a specific assignability provision, where the covenant is included in the sale of assets. While Missett's Agreement in this case did contain an assignment provision, it limited such an assignment only to "affiliates" of the company, of which HUB Pa was not. As such, (according to both Missett and the trial court below), the non-solicitation provision of the 2002 Agreement was unenforceable by HUB Pa.

The Superior Court disagreed, reversed the trial court's decision in favor of Missett, and remanded the case for further proceedings. The Court held that the Supreme Court's decision in Hess was distinguishable and not controlling, because the reasoning in Hess was clearly premised upon a "sale of assets" of a corporation, as opposed to the sale of stock. The Superior Court noted that other decisions from the Superior Court and from the federal bench, namely J.C. Ehrlich Co., Inc. v. Martin, 979 A.2d 862 (Pa. Super. 2009), Siemens Medical Solutions Health Services Corp. v. Carmelengo, 167 F.Supp.2d 752 (E.D. Pa. 2001) and Zambelli Fireworks Manufacturing Co., Inc. v. Woods, 592 F.3d 412 (3d. Cir. 2010), all recognized that under Pennsylvania law, a transfer of a corporation's stock does not destroy the corporate entity, because "a corporation is an entity irrespective of, and entirely distinct from, the persons who own its stock." In other words, even when a corporation's stock is purchased by an outside entity and the name of the corporation is changed, the corporate entity nevertheless remains the same. The Superior Court held that "the structure of a sale of equity membership interests," of an LLC is "akin to a sale of stock rather than an asset sale," and therefore, the reasoning of Ehrlich, Carmelengo and Zambelli were applicable and controlling.

As such, the Superior Court concluded that because HUB Pa had acquired Citizens Clair via the purchase of Citizen Clair's membership equity interests, and not by purchasing its assets, no assignment provision was required in order for HUB Pa to enforce the terms and provisions of Missett's 2002 non-solicitation Agreement.

You can read the Superior Court's full opinion in HUB International here: http://www.superior.court.state.pa.us/opinions/a16035_10.pdf

Monday, October 11, 2010

PA Superior Court Affirms Award of $210,704.79 in Attorneys' Fees Under Wage Payment & Collection Law

In Ambrose v. Citizens National Bank of Evans City, No.: 10-3156 (Pa. Super. 9/17/2010), the Pennsylvania Superior Court held that the Wage Payment and Collection Law permits a trial court to make an award of attorneys fees incurred by a successful plaintiff in defending against an employer's counterclaim, where that counterclaim is "inextricably intertwined" with plaintiff's wage claim.

In Ambrose, the plaintiffs sued their former employer under the Pennsylvania Wage Payment and Collection Law, arguing that the employer failed to pay to plaintiffs commissions that were due, and sought compensation, interest, liquidated damages and attorneys fees. The employer filed a counterclaims, alleging unfair competition, breach of fiduciary duties and conspiracy. After trial, the lower court found in favor of the plaintiffs and awarded them $210,704.79 in attorneys fees. Specifically, the trial court determined that employer's counterclaims were without merit, and were pursued by employer for the purpose of intimidating plaintiffs into dropping their wage claims.

Employer appealed, arguing that the trial court committed multiple errors, such as: (1) awarding attorneys' fees to plaintiffs for work performed in defending against employer's counterclaims; (2) including in its calculation of attorneys fees the work performed by plaintiffs' attorneys on appeal; and (3)awarding an unreasonable sum of attorneys' fees.

The Superior Court rejected employer's arguments and affirmed the trial court's award of the attorneys' fees. Specifically, the Superior Court held that the trial court's inclusion of the time plaintiffs were forced to spend defending employer's counterclaims was properly counted in calculating the award of attorneys' fees, because employer's counterclaims were "inextricably intertwined," with plaintiffs' wage claims so as to fall under the fee-award provision of the Wage Payment and Collection Law. The Court also held that awarding attorneys fees for work performed through the appeal process was also proper because including such fees furthers the legislative purposes behind the Wage Payment and Collection Law of making employees who are denied compensation whole. Finally, the Court held that the employer had failed to introduce sufficient evidence to challenge the reasonableness of the hourly rates or fees that were submitted by the plaintiffs and relied upon by the trial court in calculating the final award of attorneys' fees.

Consequently, the Court affirmed the trial court's award of $210,704.79 in attorneys fees against the employer.

The Superior Court's full opinion can be read here: http://www.superior.court.state.pa.us/opinions/A09027_10.pdf

Commonwealth Court: Preschool Teacher Fired For Leaving Child Unattended For Four Minutes In Violation of Employer's 100% Supervision Rule Not Entitled To Unemployment Compensation Benefits

In Oliver v. Unemployment Comp. Bd. of Review, No.: 1798 C.D. 2009 (Pa. Cmwlth. 9/1/2010), the Commonwealth Court affirmed a finding of the Unemployment Compensation Board of Review that denied claimant unemployment compensation benefits after claimant was fired from a preschool for violating the school's 100% child supervision policy.

The claimant was a preschool teacher. On February 26, 2009, claimant took her group of six children from the playroom to an outdoor play area. The employer had a policy that a teacher must supervise all of the children in her charge at all times, without exception (the "100% supervision policy"). After claimant had taken her children to the outdoor play area, claimant's supervisor noticed that one child had remained behind in the playroom. She retrieved the child and brought him to the claimant. The supervisor asked claimant how many children she had, and the claimant stated that she had six. The supervisor responded that "no ... you have five, because here is your sixth one." The supervisor reported the incident to claimant's superiors, and claimant was terminated that day for violation of the 100% supervision policy.

Claimant subsequently applied for unemployment compensation benefits, arguing that she had made an honest mistake in violating the 100% supervision policy, and as such, her actions could not constitute "willful misconduct." Claimant testified that when she brought the children outside, she had not realized that one had remained behind in the playroom because she had been distracted by falling into a piece of play equipment in the playroom. Claimant also testified that the child was only left alone for approximately four minutes. Claimant also stated that she was aware of employer's 100% supervision rule, and admitted that she had received a verbal warning for violating that policy back on February 13, 2009. The Unemployment Compensation Board of Review did not find claimant's testimony to be credible, and instead concluded that claimant had engaged in willful misconduct when she violated employer's 100% supervision rule.

On appeal, the Commonwealth Court affirmed the decision of the Board of Review denying claimant's application for benefits. The Court noted that the Board is the ultimate fact-finding body and is empowered to resolve all conflicts of evidence and determine the credibility of witnesses and the weight of the evidence. The Court recognized that the Board had found claimant's testimony internally inconsistent and not credible, and as such, the Court was not empowered to disturb that finding. However, the Court also noted that even if the claimant did stumble and accidentally lose track of the child, she admitted to not counting the children when she first brought them outside, as was required under the employer's 100% supervision policy. As such, even if her actions in losing track of the child constituted an honest mistake, it did not justify claimant's violation of employer's 100% supervision policy. The Court thus held that claimant had violated her employer's rule without establishing good cause for doing so and the Board of Review did not err in denying claimant's application for unemployment compensation benefits.

The Commonwealth Court's full opinion can be read here: http://www.aopc.org/OpPosting/Cwealth/out/1798CD09_9-1-10.pdf

Commonwealth Court: Claimant Entitled To Unemployment Compensation Benefits After Leaving Work While Upset

In Procyson v. Unemployment Comp. Bd. of Review, No. 1771 C.D. 2009 (Pa. Cmwlth. 9/22/2010) , the Pennsylvania Commonwealth Court reversed a finding by the Unemployment Compensation Board of Review that denied unemployment compensation benefits to a claimant due to a finding that the claimant had voluntarily quit her job after abruptly leaving following comments made by claimant's supervisor about claimant's job performance that made claimant visibly upset.

Claimant worked full-time for her employer from 11/2007 through 11/2008, when she was injured in a biking accident, which caused her to miss five weeks of work. Claimant then returned to work on a part-time basis with medical restrictions. During both her absence from work and her part-time schedule, the employer's general manager hired her brother to fill in for claimant's missed time. In early January of 2009, claimant was cleared by her doctor to return to work full-time. While at work on January 9, 2009, claimant called the general manager and requested to return to a full-time schedule. The general manager told claimant that she would have to talk to some other people, including employer's president, about claimant's request for a return to a full-time schedule. The general manager then told claimant that both she and the pharmacist agreed that the general manager's brother was able to do claimant's job faster than the claimant.

Claimant became very upset about these comments, and began to cry. She then gathered her belongings, called the pharmacist "two-faced," and left. The pharmacist followed claimant through the building and into the parking lot, telling claimant "don't leave like this." Claimant shouted back "no, leave me alone," and left. At no time did claimant ever say "I quit."

Claimant then reported for her next scheduled shift on Tuesday, January 13, 2009. When she arrived at work, she was called to the president's office, who (according to claimant) accused claimant in a loud voice of yelling and screaming in the store the previous Friday. The president then told claimant that she was fired, should leave and never come back.

Claimant then applied for unemployment compensation benefits, and was denied. At a hearing before the Referee, the Claimant admitted that she had walked out without completing her shift, but denied she had quit. Rather, she explained that she went home because she did not want the customers to see her upset and crying. Claimant testified that she loved her job and would never quit.

The Referee denied claimant unemployment compensation benefits, finding that claimant had abandoned her position and did not take reasonable steps to preserve her employment. Similarly, the Board of Review found that claimant had voluntarily terminated her employment on January 9, 2009 when she walked out of work while giving her employer "no inkling that she intended to return." The Board of Review also found that claimant's walking out of work because of comments by claimant's supervisor about her job performance did not constitute "necessitous and compelling reasons to quit."

On appeal, the Commonwealth Court reversed, and found that claimant was entitled to unemployment compensation benefits. Specifically, the Court emphasized that Pennsylvania law requires "evidence of a conscious intention to abandon a job," and that claimant "never expressed such a conscious intention." The Court agreed with claimant's argument that "the fact that a claimant leaves work before the end of a shift does not, in itself, establish an intent to quit." Here, the Court found that claimant was attempting to return to work full-time when the altercation occurred, and that on the day in question, she never said "I quit." And, while claimant did leave work on Friday January 9, she attempted to return to work for her next scheduled shift on Tuesday January 13. The Court noted that it was not reasonable to infer that by not calling her employer during her scheduled days off, claimant had expressed an intent to quit. Rather, the Court recognized that the employer "had the opportunity to contact the employee, but chose, instead, to drop Claimant from the Tuesday schedule without calling her." The Court held that by returning to work the following Tuesday, claimant "acted to preserve the employment relationship." The Court ultimately determined that it was the actions of the president in firing claimant on Tuesday January 13, which terminated claimant's employment, not her leaving work the Friday before. As such, the claimant was entitled to unemployment compensation benefits.

The Commonwealth Court's full opinion is available here: http://www.aopc.org/OpPosting/Cwealth/out/1771CD09_9-22-10.pdf

Monday, October 4, 2010

Third Circuit Rejects Application of Fair Pay Act To Failure-To-Promote Claims

On October 1, 2010, in the case of Noel v. The Boeing Company, No.: 08-3877, the Third Circuit Court of Appeals held, in a case of first-impression, that the provisions of the Lilly Ledbetter Fair Pay Act of 2009 (FPA) do not apply to discrimination claims under Title VII, even when an alleged failure to promote an employee results in lower compensation being paid to that employee as a consequence.

By way of background, Congress passed the FPA in direct response to the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., in which the Court held that an employer's alleged discriminatory decision that resulted in an employee's pay being set at a certain rate, constituted a "discrete act" of discrimination under Title VII, which triggered the running of the statute of limitations. In Ledbetter, for example, Ms. Ledbetter had been employed at Goodyear from 1979 until 1998. At trial, she proved that throughout her employment, her supervisors evaluated her poorly because of her sex, which resulted in her receiving lower pay than if her evaluations had been free of discrimination. She also proved that these discriminatory pay decisions affected her pay throughout the course of her employment, resulting in a salary that was less than her male peers. In dismissing her case as barred by Title VII's statute of limitations, the U.S. Supreme Court held that her claims for sex discrimination began to run when Goodyear made the alleged discriminatory evaluations. The Court rejected Ms. Ledbetter's argument that a distinct and seperate claim against Goodyear actually accrued each time she received a paycheck that was less than it should have been because of the discriminatory decisions she complained about.

In direct response to this decision, Congress passed the FPA, which amended Title VII. Now, each paycheck that stems from an alleged discriminatory compensation decision or pay structure constitutes a "tainted, independent employment-action that commences the administrative statute of limitations." In other words, if an employee is not receiving "equal pay for equal work," as a consequence of an employer's discriminatory employment decision or policy, then each paycheck received by the employee constitutes a discrete discriminatory action that carries with it its own administrative statute of limitations.

In Noel, the Third Circuit was asked to apply the provisions of the FPA to an employee's claims that his employer discriminated against him by failing to promote him to a position for which he was qualified. Specifically, Noel claimed that his employer's failure to promote him because of discriminatory reasons occurred in July and September of 2003. But, Noel did not file an administrative claim with the EEOC until March of 2005, well after the exhaustion of his 300-day administrative statute of limitations period. Noel argued on appeal that the district court improperly dismissed his case because the provisions of the FPA operated to renew his claims for failure-to-promote everytime he received a paycheck that was lower than it should have been as a consequence of that non-promotion.

The Third Circuit disagreed and affirmed the dismissal of Noel's claims. First, the Court held that Noel was pursuing a failure-to-promote claim, as opposed to a discrimintation-in-compensation claim. The Court noted that Noel did not allege a nexus between his employer's decision not to promote him and any resultant disparate compensation, nor did he allege that he received less pay than his white peers for work performed at the same grade level. Noel simply argued that he was denied his promotion for discriminatory reasons; but, had he received that promotion in the absence of discrimination, he would have received more pay. In other words, Noel never argued that he did not receive "equal pay for equal work."

The Court also looked to a decision from the D.C. Circuit Court of Appeals, and held, as a matter of law, that the FPA does not apply to failure-to-promote claims. The Court determined that the intent of Congress in passing the FPA was to address a particular type of discriminatory compensation decisions, which are often concealed and not discovered until long after Title VII's 180 or 300-day limitations period has expired. Promotion decisions, on the other hand, are discrete employment actions in and of themselves, which are readily ascertainable eitehr at the time they are made, or shortly thereafter. And, because the FPA was passed in direct response to the U.S. Supreme Court's decision in Ledbetter, the Court saw no reason to expand the scope of the FPA beyond claims for disparate compensation.

A copy of the Third Circuit's full opinion in Noel can be found here: http://pacer03.ca3.uscourts.gov/opinarch/083877p.pdf

Tuesday, September 14, 2010

Federal Court Rejects Employer's Claim of "Rolling" FMLA Policy and Allows Employee's FMLA Suit To Go To Trial

In a recent decision handed down in the case of MacFarland v. Ivy Hill, No.: 09-cv-2246 (E.D. Pa. 7/28/2010), the U.S. District Court for the Eastern District of Pennsylvania denied an employer's motion for summary judgment in a claim brought against it by a former employee who alleged that he was terminated in violation of his leave rights under the Family Medical Leave Act (FMLA). The issue before the court was whether the employee's FMLA leave expired on April 8, 2008, or sometime thereafter.

Plaintiff, Alan MacFarland, was an employee of Ivy Hill, who was eligible for FMLA leave. On October 23, 2007 Mr. MacFarland took two weeks of FMLA leave through November 7, 2007. In January of 2008, Mr. MacFarland suffered a stroke and requested FMLA leave, which listed his anticipated date of return as April 8, 2008. Plaintiff later testified that he told Ivy Hill that his April 8, 2008 doctor's appointment in which he was to recieve clearance to return to work, had been rescheduled for April 16, 2008. Plaintiff also testified that he was never informed by Ivy Hill that he would be terminated if he did not return to work by April 8, nor was he ever told by Ivy Hill that he was not eligible for additional FMLA leave past April 19, 2008.

Mr. MacFarland did not report to work on April 8, 2008, and on April 10, Ivy Hill terminated Mr. MacFarland for failing to do so. Mr. MacFarland sued, alleging improper interference with his FMLA leave rights. Specifically, Mr. MacFarland argued that he was entitled to 12 weeks of FMLA leave beginning in January of 2008, i.e., 12 weeks per calendar year, and as such, the FMLA leave following his stroke did not expire until well after April 8, 2010.

Ivy Hill argued that it employed a "rolling" FMLA period for the company, which did not run on a calendar-year basis, but provided that an employee's available FMLA leave would be counted backwards from the first date the employee took approved FMLA leave. So in this case, for example, Ivy Hill maintained that Mr. MacFarland's 12-week FMLA allowance was properly calculated beginning with his two-week FMLA leave from October 23 through November 7, which left Mr. MacFarland with 10 weeks of FMLA leave remaining when he went out in January, 2008. Therefore, his FMLA leave for his stroke would have expired on April 8, 2010.

The Court rejected Ivy Hill's argument, finding that despite its claims, Ivy Hill had failed to introduce any evidence establishing its official policy concerning FMLA leave time. While it appeared that Ivy Hill had employed a "rolling" method of calculating Mr. MacFarland's FMLA leave time, it did not produce "any evidence that demonstrated that this policy was officially chosen or that it was the policy that was applied to all employees." The Court noted that Mr. MacFarland also testified that he was never specifically informed by Ivy Hill that his FMLA leave would expire on April 8, nor that his leave could not be extended. In denying Ivy Hill's motion for summary judgment, the Court noted that while an employer is free to determine the twelve-month period in which its employees are eligible for their 12 weeks of FMLA leave, if the employer fails to make a selection, the method of calculation that is most favorable to the employees will be applied.

Therefore, an employer needs to make sure that if it chooses to select the method of calculation for eligible employees' FMLA leave, its selection needs to be properly documented and applicable to all employees. An employer should also make sure that it informs all of its employees of the selection and get employees to acknowledge that they have been so informed of the selection.

Tuesday, September 7, 2010

Third Circuit Clarifies Definition Of "Commissions" Under FLSA

In Parker v. NutriSystem, Inc., the Third Circuit was asked to rule on the validity of the compensation plan offered by NutriSystem to its call-center employees. In holding that NutriSystem's employee compensation plan did not violate the Fair Labor Standards Act (FLSA), the Court clarified what constitutes a "commission" for purposes of the FLSA.

NutriSystem's plan compensated its call-center employees using one of two methods: (1) an hourly rate of $10/hour with overtime work compensated at $15/hour; or (2) payment of a flat-rate for each NutriSystem meal plan sold to consumers, which varied from $18 to $40 depending upon the time of day the meal plan was sold and whether such a sale was completed by an incoming or outgoing call. The majority of the employees in NutriSystem's call center were compensated using this second method.

The FLSA provides for an exception for employees in the retail or service industries whose compensation is more than one and one-half times the federal minimum wage and at least half of which represents commissions on goods or services. The plaintiffs, NutriSystem call-center employees, filed suit against NutriSystem arguing that the "flat-rate" payment option described above violated the FLSA because it did not constitute a "commission." Specifically, the plaintiffs argued that in order to be a "commission" under the FLSA, payments received by employees must be based upon the final cost to the consumer. Since the flat rates under the NutriSystem plan were based upon the times of day the sales were completed and whether those sales were originated via incoming or outgoing calls, the payment method did not constitute "commissions."

The Third Circuit disagreed, and held that so long as flat-rate payments made to an employee based on sales are proportionally related to the charges passed on to the consumer, those payments may be considered "commissions" for purposes of the FLSA. The Court specifically refused to adopt a test that required a "commission" under the FLSA to be strictly based on a percentage of the end cost to the consumer.

In this case, the Court held that because NutriSystem's flat-rate plan constituted a "commission" under the FLSA because: (1) the payments available to call-center employees were proportionally related to the costs of the various meal plans charged to consumers; (2) the plan clearly made compensation under the plan contingent upon sales made by call-center employees;(3) under the public policy goals of the FLSA it was reasonable for NutriSystem to offer different commissions depending upon the time of the sale and whether the sale was the result of an incoming or outgoing call, because such a pay structure encouraged staff to take undesirable shifts and work harder on closing sales on outgoing calls; and (4) the purposes of the FLSA were not offended by NutriSystem's flat-rate plan, because the call-center employees at issue were not the lower-income employees the FLSA was enacted to protect, employees must meet certain goals in order to be eligible to earn higher payment rates, and working long hours in a call-center does not carry with it the same danger of fatigue, health risks or accidents that can occur to manual labor employees.

You can read the Court's full opinion here: http://www.ca3.uscourts.gov/opinarch/093545p.pdf

Monday, August 9, 2010

Third Circuit Upholds Ban On Islamic Religious Head Scarves For Prison Guards

In the case of EEOC v. The GEO Group, Inc., No.:09-3093 (8/2/2010) , the Third Circuit Court of Appeals held that a uniform policy mandated in the George W. Hill Correctional Facility in Delaware County, PA, which prohibits prison guards from wearing Muslim head coverings, called khimars, in the prison did not constitute religious discrimination under Title VII.

Relying upon its previous decision in Webb v. City of Philadelphia, 562 F.3d 256 (3d. Cir. 2009), the Court deferred to the arguments made by the prison that allowing any headwear to be worn by prison guards, including khimars, would constitute a substantial security risk to individuals in the prison and that any policy allowing such headwear to be worn but switched or checked at various security checkpoints, would be implausible and time consuming. The Court noted that with respect to decisions involving security and safety, it would "not substitute our judgment for that of correction facility officials." As such, the Court held that the prison's ban on all religious headwear in this instance did not constitute religious discrimination under Title VII.

You can read the full text of the Court's opinion by clicking here: http://www.ca3.uscourts.gov/opinarch/093093p.pdf

Thursday, July 1, 2010

Third Circuit: Complaining About ERISA Violations When No One Asks? You Can Lose Your Job.

On June 24, 2010, the Third Circuit Court of Appeals held, in the case of Edwards v. A.H. Cornell and Son, Inc., that unsolicited internal complaints by employees about alleged employer violations of ERISA are not protected under ERISA's anti-retaliation provision. In so doing, the Court held that the employer's termination of its HR manager after she made complaints to her supervisors about alleged ERISA violations by the employer that she had uncovered, was not illegal.

The plaintiff, Shirley Edwards, was the HR director for A.H. Cornell and Sons, Inc.. In early 2009, she discovered that A.H. Cornell was allegedly engaging in numerous ERISA violations, such as allegedly administering the group health plan on a discriminatory basis, misrepresenting to some employees the cost of coverage in order to dissuade employees from opting in, and enrolling non-citizens in its ERISA plans by providing false social security numbers and other fraudulent information to insurance carriers. Edwards objected to and complained about these alleged violations to her supervisors. As a result of her complaints, she was fired.

Edwards then filed suit, claiming that her termination was illegal under the federal ERISA law, which makes it unlawful for an employer "to discharge, fine, suspend, expel or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding," relating to ERISA or group health plans. Edwards argued that her complaints about A.H. Cornell's alleged ERISA violations fell squarely within the protection of this provision, and as such, her subsequent termination was illegal.

The Third Circuit disagreed, and held for the first time that the ERISA "whistleblower" protection language quoted above only applies when the complaining employee does so in the context of an "inquiry or proceeding," and that the phrase "inquiry or proceeding" is limited to formal actions, not unsolicited day-to-day complaints made in the course of one's employment. The Court noted that, in this case, Edwards' complaints to her supervisors were not requested or asked for, and were unconnected with any internal or external investigation or probe. Rather, Edwards made her complaints by her own choice in her role as the HR representative. And, in doing so, was clearly not "testifying" or "giving information" in the context of a formal hearing or process. As such, Edwards' complaints did not fall under the protection of the ERISA anti-retaliation provision, and offered her no protection for continued employment.

If you are an HR representative in Pennsylvania, be aware of the fact that you can now be terminated or otherwise disciplined for complaining to a supervisor or manager about alleged ERISA violations in your company, unless your complaints are made in the context of a formal inquiry or proceeding. The troubling part about this case is that it practically allows for no recourse by a conscientious HR representative to remedy or complain about such conduct by their employer that the HR representative discovers, if he or she is truly interested in keeping his or her job. Based solely upon the language of the ERISA statute, the Court's legal logic in this case is intellectually sound. But, the practical implications and repurcussions of the Court's holding are decidedly less so. Hopefully, Congress will take note of this decision, along with the other Circuits that have addressed this same issue, and amend the ERISA law to clearly prohibit retaliation even in such informal circumstances. Until that day, however, my advice to all HR representatives or other employees who find themselves in this quandry? Tread lightly. And, be careful what you complain about and who you complain to.

You can read the Court of Appeals' Opinion in Edwards v. A.H. Cornell and Son, Inc., here: http://pacer03.ca3.uscourts.gov/opinarch/093198p1.pdf

Tuesday, June 29, 2010

Dept. of Labor Holds That Same-Sex Couples Have FMLA Rights For Child Leave

In a decision published on June 22, 2010, the U.S. Department of Labor formally clarified that the phrase "a parent standing in loco parentis," to a child for purposes of FMLA leave encompasses all individuals who exercise day-to-day responsibilities to care for and financially support a child, regardless of that person's biological relationship to the child.

An eligible employee may request FMLA leave for the birth of a son or daughter or to care for a son or daughter with a serious health condition. The FMLA statute defines "son and daughter" as including within its scope "a child of a person standing in loco parentis." The DOL regulations further define "in loco parentis" to include those indiviuals who provide day-to-day care and financial support for a child. In its June 22 decision interpreting this regulation, the Department formally stated that "employees who have no biological or legal relationship with a child may nonetheless stand in loco parentis to the child and be entitled to FMLA leave." In providing examples of this interpretation, the Department stated that "an employee who will share equally in the raising of an adopted child with a same sex partner, but who does not have a legal relationship with the child, would be entitled to leave to bond with the child . . . because the employee stands in loco parentis with the child." The Department also noted that in situations where a child's biological parents divorce and then each remarries, the two biological parents and the two non-biological step-parents would all have "equal rights to take FMLA leave to care for the child."

The Department also noted that when an employer has questions as to whether an employee's relationship is covered under the FMLA, the employer may require the employee to provide "reasonable documentation or statement of the family relationship."

A link to the full Department of Labor decision can be found here: http://www.dol.gov/whd/opinion/adminIntrprtn/FMLA/2010/FMLAAI2010_3.pdf

Friday, June 18, 2010

U.S. Supreme Court Side-Steps Questions of Employee Privacy In Electronic Communications

On June 18, 2010, the U.S. Supreme Court handed down its opinion in the case of City of Ontario v. Quon, a matter that has been closely watched by labor and employment lawyers across the country, who were expecting the first pronouncement or analysis by the High Court into the scope and boundaries of employee expectation of privacy in electronic communications in the workplace. Unfortunately, all those who were anxiously awaiting guidance in this age of rapidly advancing technology or the advent of new legal principles for the techno-age, will be disappointed. In a unanimous decision, the Supreme Court intentionally (and conspicuously) side-stepped all troubling and contentious issues swirling around privacy of electronic communications in the workplace, and instead chose to resolve this case on much narrower grounds, by simply holding that under the Court's existing precedents, the government employer in Quon did not violate the employee's Fourth Amendment rights when it audited his text message transcripts because the search that was conducted was reasonable and well within Constitutional limits.

Briefly, the Quon case involved a civil action filed by Quon, a member of the City of Ontario SWAT team, against the City of Ontario and various government officials, alleging violations of the Fourth Amendment to the U.S. Constitution (right to be free from unreasonable searches and seizures), and other claims based on federal and California law, after the City police department conducted an audit of two-months of Quon's text message transcripts in order to determine whether Quon was sending text messages about non-work related matters during working hours. Specifically, the City had issued text-messaging pagers to all of its SWAT team members in order to enable them to respond more quickly to emergencies. The pagers came with a text-messaging plan that allowed a maximum number of text characters to be sent each month. At the time that the pagers were issued, the City had in place an electronic communications policy, which stated that the City had the right to monitor all network activity, including email and Internet activity without notice, and that the users of the network had no expectation of privacy in any communications sent over the City's network. While the text messages that were sent via the SWAT pagers were transmitted by a third-party wireless carrier rather than over the City's network, the SWAT members were told on at least one occasion that the text messages would be treated by the City the same as emails, and thus, would be subject to the City's electronic communication policy.

A few months after the pagers were issued, Quon was approached by a supervisor, who told Quon that he had exceeded his monthly text message character allotment, and that an overage charge was being charged to the City. Quon's supervisor told Quon that if he simply paid for the overage charge, the supervisor would not conduct an audit of Quon's text messages to see whether the texts were work-related or not. Quon agreed and paid for the overage himself.

After many subsequent months of incurring overage charges, Quon's supervisor decided that he was "tired of being a bill collector," and ordered an assistant to retreive the text messaging transcripts for Quon and some other officers for purposes of auditing the content and usage of the text messages being sent during work hours. Two months of transcripts were received by the City, and it proceeded to redact all text messages sent by Quon outside his scheduled work shifts for those months, and instead, looked only at the content of those messages sent during work hours. The City discovered that during work hours in August of 2002, Quon had sent 456 text messages, only 57 of which were work-related. On an average workday, Quon would send or receive 28 messages, of which only about 3 were related to police business. Many were sexually explicit, as well. Quon was allegedly disciplined for violating internal police rules following this audit.

Quon then filed suit, claiming that the City's search of his text message transcripts constituted a violation of his Constitutional right to be free from unreasonable searches under the Fourth Amendment. Quon maintained that the City's electronic privacy policy had been abrogated by the City when his supervisor began a practice of not auditing Quon's text messaging on a monthly basis, so long as Quon paid for any related overage charges. Quon argued that this practice then created an expectation for him that the content of his text messages were private and protected. The 9th Circuit Court of Appeals, below, had agreed with Quon and held the search unconstitutional.

When the Supreme Court first agreed to hear this case, it was expected that the Court's ultimate decision would involve an analysis of the interplay between electronic communications in today's world, the privacy expectations that employees may have in sending or receiving such electronic communications versus an employer's expectation of an efficient work environment. Yet, the Supreme Court avoided all of these thorny issues, and simply held that, based upon the facts of this case, that the City's search was reasonable under the Fourth Amendment, and therefore permissible. In so doing, the Court explicitly assumed that: (1) Quon had a reasonable expectation of privacy in the text messages sent on the pager provided to him by the City; and (2) the principles applicable to a government employer's search of an employee's physical office apply with the same force to when the employer intrudes on an employee's privacy in the electronic sphere.

Other than these two assumptions (which were accepted by the Court solely for purposes of deciding this case), the Court explained its reasons for side-stepping any questions regarding the nature of electronic communications themselves as follows:

"The Court must proceed with care when considering the whole concept of privacy expectations in communications made on electronic equipment owned by a government employer. The judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear. . . Prudence counsels caution before the facts in the instant case are used to establish far-reaching premises that define the existence, and extent, of privacy expectations enjoyed by employees when using employer-provided communication devices. . . Rapid changes in the dynamics of communication and information transmission are evident not just in the technology itself but in what society accepts as proper behavior. As one amici brief notes, many employers expect or at least tolerate personal use of such equipment by employees because it often increases worker efficiency. . . Another amicus points out that the law is beginning to respond to these developments, as some States have recently passed statutes requiring employers to notify employees when monitoring their electronic communications. . . At present, it is uncertain how workplace norms, and the law’s treatment of them, will evolve."

The Court continued its dance around these thorny issues by noting that: "the Court would have difficulty predicting how employees’ privacy expectations will be shaped by those changes or the degree to which society will be prepared to recognize those expectations as reasonable . . . Cell phone and text message communications are so pervasive that some persons may consider them to be essential means or necessary instruments for self-expression, even self identification. That might strengthen the case for an expectation of privacy. On the other hand, the ubiquity of those devices has made them generally affordable, so one could counter that employees who need cell phones or similar devices for personal matters can purchase and pay for their own. And employer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated. A broad holding concerning employees’ privacy expectations vis-à-vis employer-provided technological equipment might have implications for future cases that cannot be predicted. It is preferable to dispose of this case on narrower grounds."

Therefore, while many of us in the legal community were anxiously awaiting the Supreme Court's weighing-in on these emerging issues of electronic communications, employee privacy, and employer interests, it seems that we will have to wait a bit longer.

In the meantime, perhaps Congress should give iPhones to all of the Justices and their Clerks.

You can read the full Supreme Court opinion in Quon here: http://www.supremecourt.gov/opinions/09pdf/08-1332.pdf

Tuesday, May 25, 2010

U.S. Supreme Court: Employee May Challenge Employer's Use of Discriminatory Policy Even If Policy Itself Was Not Challenged When Adopted

In Lewis v. City of Chicago, No.: 08-974 (May 24, 2010), the U.S. Supreme Court held that under Title VII, an employee may challenge an employer's use of an alleged discriminatory employment policy even if the employee failed to administratively challenge the alleged discriminatory policy at the time it was adopted by the employer.

Lewis involved a class-action lawsuit that was filed by 6,000 fire-fighters against the City of Chicago, alleging that the City's policy for hiring fire-fighters from a pool of candidates who took a written examination was discriminatory under Title VII, as it worked a disparate impact against African-Americans. Specifically, the City adopted a policy whereby all individuals who scored at least 89 out of 100 points on the written exam would be placed in one pool of candidates, while individuals who scored between 65 and 88 on the written exam would be placed into a second pool. As the City had the need to fill vacant fire-fighter positions, it randomly chose candidates from the 89-100 score pool first, until that pool was exhausted. The City admitted that this system, which it formally and publically adopted on January 26, 1996, was discriminatory.

However, while the City admitted that the policy was discriminatory, no claims of discrimination were ever filed against the City before the EEOC within 300 days of the City's adoption of the policy. However, on March 31, 1997, a charge of discrimination was filed before the EEOC by an individual who was a member of the 65-88 score candidate pool, alleging discrimination by the City through the use of the policy.

The City moved to dismiss the case, arguing that because none of the plaintiffs ever challenged the legality of the policy within 300 days of when the City publically adopted it, the plaintiffs' suit alleging discrimination as a consequence of that policy was thus time-barred. The City further claimed that while the policy was admittedly discriminatory when adopted in 1996, since no challenge to its validity was made within 300 days after its adoption, its legality could no longer be questioned.

The Supreme Court disagreed and held that the plaintiffs stated a valid cause of action. Justice Scalia, writing for a unanimous Court, held that the disparate impact prohibition contained within Title VII plainly bars the "use" of a particular employment practice that causes a disparate impact. Therefore, the plaintiffs here were able to challenge the legality of the City's actual implementation of the alleged discriminatory policy, not just its adoption. As it was undisputed by all the parties that the City had "used" the policy to hire fire-fighters exclusively from the 89-100 score candidate pool within 300 days of when plaintiffs filed their charge of discrimination, the Supreme Court held that dismissal of plaintiffs' case was improper.

A copy of the Supreme Court's full opinion can be found here: http://www.supremecourt.gov/opinions/09pdf/08-974.pdf

Tuesday, April 13, 2010

New FLSA Amendment in Health Care Reform Bills Requires "Reasonable Break Time" for Nursing Mothers

Included within the two health care reform bills signed into law by President Obama on March 23 and March 30, 2010, was an amendment to the Fair Labor Standards Act, which requires employers to provide nursing mothers with "reasonable break time" to pump breast milk for up to one year after the birth of a child.

This new FLSA provision does not define what constitutes a "reasonable" break time, or what seperate penalties may be imposed for an employer's failure to provide such time. The amendment does provide for a exemption for employers with less than 50 employees, if the employer can show that the requirements would impose an "undue hardship."

It is expected that the Department of Labor will be promulgating regulations sometime in the future to guide employers in the application and interpretation of this requirement.

Friday, April 9, 2010

Third Circuit Holds That Difficulty Getting To Work Because of Disability May Require Accomodation Under ADA

On April 8, 2010, the Third Circuit Court of Appeals in the case of Colwell v. Rite Aid Corporation, No.: 08-4675, held that under certain circumstances, an employer may be required under the Americans with Disabilities Act to accomodate an employee's disability-related difficulties in getting to and from work. Specifically, the Court determined that a shift-change, which is requested by a disabled employee in order to ease that employee's ability to commute, would be a type of accomodation required under the ADA.

In Colwell, the employee worked as a cashier for defendant, Rite Aid Corporation. As a matter of personal preference, her available shift hours were from 9:00 AM to 2:00 PM or 5:00 PM to 9:00 PM. Shortly after her hire date, the employee was diagnosed with a medical condition in her left eye that eventually caused her to go blind in that eye. Although the employee was still able to see out of her right and perform all of her duties at work, she informed her supervisor that her partial blindness made it dangerous and difficult to drive at night. Employee provided her supervisor with a note from her doctor, in which it was recommended that employee not drive at night. Employee then requested from her supervisor that she only be assigned day-shifts because she could not drive at night, and because public transportation was not an option for her, as the bus stopped running at 6:00 PM and no taxis were available. Employee's supervisor refused, telling employee that to assign her only day shifts would not be fair to other employees. Following that refusal, employee was forced to have her family members shuttle her to and from work for her night-shifts, which she claimed created a hardship for her family.

Employee filed suit, claiming that Rite Aid had failed to provide her with a reasonable accomodation under the ADA by failing to modify her work schedule. The trial court entered an order dismissing employee's accomodation claim, ruling that because employee did not require any accomodation to perform her job duties once at work, the accomodations employee sought had nothing to do with her work environment or the circumstances in which she performed her work. Thus, Rite Aid had no duty to accomodate employee's commute to and from work.

On appeal, the Third Circuit disagreed, and reversed the trial court's ruling on this issue. Specifically, the Court rejected the trial court's reasoning that "commuting to and from work falls outside the work environment," holding that "the reach of the ADA is not so limited." Rather, the Court noted that the ADA specifically defines the term "reasonable accomodation," to include "modified work schedules" - the exact type of accomodation requested by employee in this instance. Contrary to the trial court's determination, the Third Circuit held, as a matter of law, that "under certain circumstances the ADA can obligate an employer to accomodate an employee's disability-related difficulties in getting to work, if reasonable. One such circumstance is when the requested accomodation is a change to a workplace condition that is entirely within an employer's control and that would allow the employee to get to work and perform her job."

The Court cautioned, however that "our holding does not make employers responsible for how an employee gets to work," but noted that, in this instance, the employee was not asking for help in getting to or from work - rather, she was only requesting a shift-change that would ease her ability commute.

Wednesday, April 7, 2010

EEOC Cautions Against Use of Credit Checks To Screen Job Applicants

In March, the Equal Employment Opportunity Commission released a legal opinion letter on its website cautioning that the use of credit checks by employers to screen job applicants could be unlawful under federal discrimination laws, if the use of credit checks results in a disproportionate exclusion of women or minority candidates for consideration of employment. The use of credit checks would only be permissible under those circumstances if the employer is able to demonstrate that the credit check process is needed for the employer to operate safely and efficiently. But, as the opinion letter also points out, at least one EEOC attorney has already testified that credit checks have not been shown to be a valid measure of job performance.

A link to the opinion letter can be found here: http://www.eeoc.gov/eeoc/foia/letters/2010/titlevii-employer-creditck.html

Thursday, March 11, 2010

Lay Testimony May Supplement Medical Testimony in FMLA Cases

In Schaar v. Lehigh Valley Health Services, Inc., the Third Circuit Court of Appeals held, in an FMLA suit concerning the denial or applicability of FMLA leave, that an employee may use his/her own lay testimony to supplement the medical testimony of a health care professional in order to allow a jury to ultimately determine whether the employee was suffering, or had suffered, from a "serious health condition," at the time the FMLA leave was requested or taken.

The Court of Appeals noted, however, that contrary to the rules in the Fifth and Ninth Circuits, in an FMLA case concerning a "serious health condition," lay testimony of the employee by itself is insufficient to allow the employee's claim to proceed to a jury.

Monday, March 8, 2010

At-Will Employee May Sue For Wrongful Termination When Fired In Retaliation For Complaining About Drug-Testing Violations

The U.S. District Court for the Middle District of Pennsylvania has ruled that an at-will employee may sue his/her former employer for wrongful termination where the employee is terminated in retaliation for making complaints about his/her employer's or supervisor's failure to comply with Federal and State mandatory drug-testing requirements, where such requirements have been adopted for the protection of the safety of the public at large.

In Oliveri v. U.S. Food Service d/b/a North Star Foodservice, District Judge James M. Munley dismissed Defendant/employer's Motion to Dismiss plaintiff's complaint where plaintiff, at-will employee, alleged that his termination by employer was unlawful in violation of the public policy of Pennsylvania. Defendant/employer was a commercial trucking company, which was required by federal regulations to perform random drug-testing on its commercial truck drivers. Defendant had employed plaintiff as a manager of transportation, an "at-will" position. During the course of his employment, plaintiff discovered that his immediate supervisor was delaying or excusing testing on several drivers, all in violation of federal regulations. Plaintiff complained to other supervisors in the company, but to no avail. Finally, plaintiff contacted an anonymous hotline that Defendant/employer maintained to allow employees to make complaints, reciting his supervisor's violations of the federal drug-testing requirements. The next day, plaintiff's supervisor told plaintiff that he knew plaintiff had complained to the hotline and terminated his employment.

Plaintiff sued Defendant/employer, alleging that despite his status as an "at-will" employee, his termination was in violation of the public policy of Pennsylvania. The Court agreed, holding that Pennsylvania courts have recognized that highway safety and the regulation of commerical trucks are significant matters of public policy, and that Pennsylvania has specifically adopted by reference the federal drug-testing regulations for commerical truck drivers that plaintiff claimed were violated by his supervisor. Therefore, the Court allowed plaintiff's claim of wrongful termination to proceed.

Helicopter Pilots Entitled to Overtime Pay in Pennsylvania, New Jersey & Delaware

Commerical helicopter pilots in Pennsylvania, New Jersey or Delaware, are now entitled to mandatory time-and-a-half overtime pay for all hours worked in excess of 40 during a single workweek.

In Pignataro v. Port Authority of New York and New Jersey, the Third Circuit Court of Appeals held that helicopter pilots did not qualify for the "learned professional" exemption under the federal Fair Labor Standards Act, because the skills and training necessary to obtain a helicopter pilot's certification and license did not require "advanced knowledge that is customarily acquired from a prolonged course of specialized instruction." Thus, helicopter pilots who work more than 40 hours a weeks are entitled to mandatory overtime pay.

In reaching this conclusion, the Court of Appeals noted that jobs that traditionally fall within the "learned professional" exemption are those that require academic degrees from a college or university. Helicopter pilots, however, are not required to have academic degrees or spend a significant amount of time in the classroom. Rather, the majority of pilots' instruction takes place in the air, logging in-flight hours and undergoing in-flight instruction. And, the Court noted that a helicopter pilot's passing of practical and written tests do not qualify as the type of "prolonged court of specialized intellecutal instruction and study," that is required under the federal regulations in order for an employee to qualify for the "learned professional" exemption.