Archive for January, 2012

FMLA Expansion Proposed to Cover Attendance at Military Gatherings, Childcare Needs

Spouses, parents, and children of members of the armed services would be able to take family and medical leave to attend military gatherings or handle childcare or finances without fear of losing their jobs, under a proposal put forth today by First Lady Michele Obama.

Obama is proposing amendments to the Family and Medical Leave Act to also extend military caregiver leave to family members of veterans for up to five years after leaving the military. As of now, only care for currently serving members is covered.

The proposal would also expand the military family leave provisions of the FMLA by extending qualifying exigency leave to employees whose family members serve in the regular armed forces–as opposed to only families of National Guard members and reservists as the law now provides.

The proposed FMLA expansion would include as much as 12 weeks of leave from work to help a military member deployed on short notice, as well as long as 26 weeks of leave to care for an injured or ill service member.

Indiana House Passes Right-to-Work Law; What Will Its Impact Be?

Indiana’s house last week passed a right-to-work law, moving one step closer to becoming the first state in more than a decade to pass such legislation.

A right-to-work law bars unions from requiring employees to join the union or pay union dues as a condition of employment. Right-to-work laws are permitted under the Taft Hartley Act, a 1947 law amending the National Labor Relations Act.

Some argue that right-to-work laws are good for employers and employees because they give employers more flexibility in setting wages. In support of this position, they point to studies showing a greater influx of jobs into right-to-work states.

Conversely, opponents of right-to-work laws says that they are hostile to union organizing and will result in lower wages.

What’s your view?

Texas Supreme Court Affirms Noncompete Enforceable When Consideration Is Discounted Stock Options

A noncompete agreement is enforceable by law when supported by consideration in the form of discounted stock options, the Texas Supreme Court has ruled.

The Court ruled that the agreement was enforceable because the stock option linked the employee’s interests to the company’s long-term interests, which could justifiably be protected with a non-compete agreement.

As summarized by, “This decision could potentially have a huge impact on future non-compete agreements between employers and their employees in Texas. Most pundits agree that it has tipped the scales in favor of businesses by expanding the definition of what is considered worthy of protection by a non-compete beyond the standard mixture of confidential information and trade secrets. That said, this area of law is far from settled and it remains to been seen just how liberally this expanded definition will be applied. ”

The ruling in Marsh USA Inc. v. Cook was handed down in June, and reaffirmed in December when the high court denied a motion to rehear and substituted a new opinion for the old one.

Novartis Sales Reps to Share in $99M Settlement of Overtime Claims

Pharmaceutical giant Novartis reached an agreement this week to compensate over 7,000 sales representatives seeking overtime pay.

Under the terms of the settlement, which is subject to court approval, the company will pay $99 million to set things right.

The issue of whether pharma sales reps are exempt from overtime requirements under the Fair Labor Standards Act is pending before the U.S. Supreme Court. The companies argue they should be exempt because they work independently under incentive pay arrangements.

Evidently Novartis decided not to wait for that question to be resolved, and wanted to get it case over with and put the matter behind it as quickly as possible.

EEOC Sues Employer for Not Allowing Employee to Attend Religious Convention

Should the Ozarks Electric Cooperative have accommodated a Jehovah’s Witness who wanted one day off from work so she could attend a religious convention? The Equal Employment Opportunity Commission thinks so. And this week it took up the cause of Julia Solis, a call center customer service representative.

The EEOC charged in a lawsuit this week that the cooperative violated Title VII  of the 1964 Civil Rights Act by refusing Solis permission for time off and then firing her.

The EEOC said it tried to resolve the claim through negotiation, but that effort failed.

As a reminder, Title VII requires an employer to accommodate an employee’s need for time off for religious observance unless doing so would cause it undue hardship.

So, if Ozark fights this suit, it will have its chance to prove undue hardship.

Here’s the EEOC announcement of the action.

Federal Court: FLSA Plaintiff Not Bound by Arbitration Agreement

A Fair Labor Standards Act claimant does not have to send her claim to arbitration, a federal district court judge in New York ruled recently.

The case is important because it veers from a recent U.S. Supreme Court ruling that required a California couple to take to arbitration their claims against AT&T under an arbitration provision waiving all class claims. The court said that in that instance the couple could get redress for ther claims via arbitration and would actually do better than if they sued.

Judge Kimba Wood, writing for the U.S. District Court,  said this case was different because the plaintiff would not be able to vindicate her FLSA rights on an individual basis because of the costs she would entail relative to the size of her claim, around $1,800.

Read more about the decision, Sutherland v. Ernst & Young, 10 Civ. 3332 (MHD) (Jan. 13, 2012), here.

EEOC Busier Than Ever, But Also More Efficient

Just what employers don’t want to hear, but probably feel instinctually. Private sector employment discrimination charges were at an all-time high in 2011.

The Equal Employment Opportunity Commission today reported it received a record 99,947 charges of employment discrimination and obtained $455.6 million in relief through its administrative program and litigation in Fiscal Year 2011.

At the same time, the EEOC lowered its inventory of charges by 10 percent–the first year that’s happened since 2002.

According to the EEOC, the fiscal year 2011 data also showed:

  • Due to EEOC’s enforcement programs in both the private and federal sectors, 5.4 million individuals benefited from changes in employment policies or practices in their workplace during the past fiscal year.
  • Through its combined enforcement, mediation and litigation programs, the EEOC was able to obtain a record $455.6 million in relief for private sector, state, and local employees and applicants, a more than $45 million increase from the past fiscal year and continuing the upward trend of the past three fiscal years.
  • The mediation program reached record levels, both in the number of resolutions – 9,831 – which is 5% more than in FY 2010 (9,362), and benefits — $170,053,021– $29 million more than FY 2010.
  • The Commission filed 300 lawsuits and its litigation efforts resulted in $91 million of relief, representing the third year in a row that the relief obtained was greater than in the preceding year. Continuing to build on its commitment to systemic litigation, 23 of the lawsuits filed involved systemic allegations involving large numbers of people and an additional 67 had multiple victims (less than 20).
  • The Commission also filed 261 “merits” (merits suits include direct suits and interventions alleging violations of the substantive provisions of the statutes enforced by the Commission and suits to enforce administrative settlements) lawsuits.
  • EEOC’s public outreach and education programs reached approximately 540,000 persons.
  • In the federal sector, where the EEOC has different enforcement obligations, the Commission resolved a total of 7,672 requests for hearings, securing more than $58 million in relief for parties who requested hearings.  It also resolved 4,510 appeals from final agency determinations.

Read more from the EEOC’s announcement.

EEOC Charges Parts Manufacturer Changed Layoff Criterion to Target Older Employees

A parts’ manufacturer changing criterion for layoffs suggests age discrimination, the Equal Employment Opportunity Commission charged last week.

The EEOC sued Auburn Hills, Michigan manufacturer Hutchinson Sealing Systems, saying it manipulated its criteria for laying off project managers based on age. According to the EEOC, in the first round of layoffs, the company selected a 62-year-old manager for layoff–at the time its oldest project engineer.

But in rounds two and three, the company changed the criterion, as a result of which the second and third oldest managers got pink slips.

This was only one month after the first layoffs, the EEOC said. Had the company kept to the original criterion, then much younger engineers would have been selected for layoff, the commission contended.

Interestingly, the EEOC announcement doesn’t say what the new criteria were. Apparently they’re saving that revelation for when the case goes to trial.

But there’s a cautionary tale for employers in this case: If you change your criteria for deciding who is going to lose a job, make sure you have a nondiscriminatory explanation for doing so.

Read more.

FLSA Forbids Retaliation Against Individuals Who Make Oral Complaints, Government Affirms

If you had any doubts whether oral complaints of wage and hour violations are protected under the Fair Labor Standards Act, the U.S. Department of Labor’s Wage and Hour Division recently put that question to rest.

The answer is an emphatic yes: All complaints are protected from retaliation, regardless of whether they are in writing or conveyed orally.

Complaints made to the Wage and Hour Division are protected, and most courts have ruled internal complaints to an employer are also protected, the agency said in a recent fact sheet.

Other points to remember:

  • retaliation protections apply to all employees of an employer even in those instances in which an employee’s work and the employer are not covered by the FLSA; and
  • the protection also applies where there is no current employment relationship between the parties; for example, it protects an employee from retaliation by a former employer.

Religious Organization Health Plans Must Cover Birth Control, HHS Says

The U.S. Department of Health and Human Services announced Friday that religious organizations will have to cover birth control in their health plans, but may take up to a year longer to comply with the requirement than nonreligious organizations.

The rule implements a provision of the 2010 health care reform law mandating that all new insurance policies cover preventive services without co-pays or other out-of-pocket charges.

The rule will take effect Aug. 1, 2012, as plans renew, but HHS gave church organizations an additional year to comply.

Churches sought an exemption from the rule because of the Catholic Church’s opposition to birth control. HHS wouldn’t go that far, however.

To qualify for the delay, an institution must certify to U.S. authorities that it is a nonprofit organization and that, for religious reasons, it does not presently offer contraception to its workers. The employer must also notify employees that birth control is available through other sources such as community health centers, public clinics and hospitals, with support provided to low-income patients who might otherwise have problems paying for it.

You can read HHS Secretary Sebelius’ statement on the new rule as it concerns religious organizations here.