Archive for July, 2012

Contraception Coverage Requirement On Hold Against Colorado Company

Although the U.S. Supreme Court has ruled that the Patient Protection and Affordable Care Act is constitutional, that hasn’t kept some employers from fighting a rear guard legal battle to prevent enforcement of the law’s provisions.

One such employer, which operates in Colorado, last Friday won a temporary reprieve from the law’s requirement that it provide no-cost insurance coverage for preventive care and screening for women, including contraception.

What’s interesting about this case is that the employer is a nonprofit secular company and not a religious institution. The decision noted that Hercules Industry Inc., while secular, is run in a manner that “sincerely reflects” the Catholic religious views of it owners.

According to U.S. District Judge Richard Kane, Hercules would suffer irreparable harm if the requirement were enforced against it, “in light of the extensive planning involved in preparing and providing its employee insurance plan, andthe uncertainty that this matter will be resolved before the coverage effective date,” Nov. 1, 2012.

As for the harm to the government if it can’t enforce its regulation, the court said this harm “paled in comparison to the possible infringement upon Plaintiffs’ constitutional and statutory rights.

The law’s opponents shouldn’t take too much heart from this ruling. It is only a temporary injunction, and the government might yet prevail when the matter goes to trial.

This is likely a bump in the road rather than a course reversal.

You can read the decision here.

Court Okays Class Action in Sex Discrimination Suit Against Goldman Sachs

Class action employment lawsuits remain potent weapons in the hands of opportunistic plaintiffs’ attorneys, in spite of last year’s ruling by the U.S. Supreme Court in the Wal Mart case making it more difficult to mount these types of suits.

Venerable Wall St. firm Goldman Sachs now has a big case on its hands.

A federal district court in New York ruled July 17 that a group of the firm’s female employees may sue as a class over the alleged mistreatment the business has subjected them to.

According to the complaint, bias against women pervades the company and that women are discriminated against in pay, promotions, and evaluations. Male managers have unchecked discretion over the women, the plaintiffs charge.

The court ruled that the plaintiffs’ sex discrimination claims have enough facts in common to allow them to proceed as a class.

It said the plaintiffs identified a number of specific, companywide “employment practices” and “testingprocedure[s].” These include the “360-degree review” process, the forced-quartile ranking of employees, and the “tap on the shoulder” system for selecting employees for promotion.

There’s an entire web site dedicated to the case and it includes a link to the court’s ruling.

At EEOC’s Urging, Court Reins in Company That Allowed Harassment of Male Worker

A female employee musn’t be permitted to continually harass a male co-worker, a U.S. district court admonished a company that operates at the Las Vegas airport.

The EEOC sought an injunction against Prospect Airport Services Inc., one of two companies that provide these services. The commission charged that the company had failed to protect the male employee despite a $75,000 settlement in the case.

On Wednesday, U.S. District judge Kent Dawson granted the relief even though the company’s attorney claimed it had agreed to do most of the things the judge ordered, according to a report in

No ERISA Violation in Bank of America’s Cash Balance Plan, Fourth Circuit Says

When Bank of America converted from a defined benefit to a cash balance plan,  employees David McCorkle and William Pender objected that DB participants wound up with less money because of the formula the company used to calculate their benefits.  They sued on behalf of a class of similar participants who they claimed suffered the same fate.

Not so, ruled the U.S. Court of Appeals for the Fourth Circuit. It held this week that the bank’s definition of a “normal retirement age”  in calculating lump sum distributions did not violate the Employee Retirement Income Security Act.

Under that definition, “normal retirement age” occurred either after five years of vesting service or upon turning age 65 if they left the plan before five years or joined the plan after age 60.

This definition was designed to avoid a phenomenon known as the whipsaw effect–“a potentially large disparity between the employee’s current hypothetical account balance and the  lump sum distribution that the employee would be entitled to receive.”

The Fourth Circuit said this definition complies with ERISA, noting that “IRS guidance has long recognized that a retirement plan may specify an NRA that is below age 65.”

The appeals panel also rejected the plaintiffs’ argument that the conversion amounted to an illegal “backloading” of benefits under the statute–basically that it works against older employees in the latter stages of their  career, and instead benefits younger workers.

You can read Pender v. Bank of America here.

This just in: This post has been listed on the Publishers’ ClearingHouse website! Hey, I’ll take publicity whereever I can find it. Check it out.

Hospital’s Off-Duty Access Rule Violates Labor Law, NLRB Holds

The University of Southern California Hospital’s permitting off duty employees to enter the hospital only if they are visiting patients, are patients themselves, or are conducting “hospital-related business” violates the National Labor Relations Act, the National Labor Relations Board ruled earlier this month.

The decision in Sodexho America LLC affirms that there are limits to how far an employer can go in limiting of-duty access to the workplace.

Under the hospital’s rule, off-duty employees were not allowed to enter or re-enter the interior of the hospital or any other work area outside the hospital except to visit a patient, receive medical treatment or to conduct hospital-related business. An off-duty employee is defined as an employee who has completed his/her assigned shift.

Hospital-related business is defined as the pursuit of the employee’s normal duties or duties as specifically directed by management.

The NLRB noted that in 1976, it ruled that an employer’s rule barring off-duty employee access to a facility is valid only if it limits access solely to the interior of the facility, is clearly disseminated to all employees, and applies to off-duty access for all purposes, not just for union activity.

Applying that test to the current situation, the NLRB ruled that the hospital’s policy was unlawful because it gave management “unfettered discretion to decide when and why employees may access the facility.”

And that violates Section 8(a)(1) of the NLRA, which protects the right of employees to engage in concerted activities.

Read the decision here.

Workers Allege Overtime Pay Violation in Office Depot Rewards Program

Should incentive pay bonuses given out to Office Depot employees count toward calculation of their overtime? That’s the legal issue that is pending in a lawsuit in California. The suit claims that the store violated the Fair Labor Standards Act and California’s wage and hour statute in failing to pay overtime on over 5,900 so-called “Bravo Awards” cards distributed by the company in recognition of the employees’ hard work.

According to the San Francisco Employment Law Blog, “If a bonus or other incentive payment is not discretionary, as in this case, employers must include the amounts of such bonuses in their calculation of the regular rate of pay for overtime. For example, if there is a non-exempt worker who works 60 hours in a week at $20 an hour. and that worker then receives a $50 non-discretionary bonus that week, a company would need to include the $50 into its calculation of the employee’s regular rate of pay in determining overtime. As such, the $50 bonus will bump the employee’s regular rate of pay that week from $20 to $21.25 an hour. The worker will as such be eligible for overtime at one and a half times the calculated regular rate of pay of $21.25, $1.25 more than the set amount before the bonus.

U.S. District Court Susan Illston this month certified the lawsuit–Provine v. Office Depot–as a class action.

A similar case are also pending against Bloomingdale’s.

You can read more about the issue here.

EEOC Tweaks Federal Sector Complaint Procedures

The Equal Employment Opportunity Commission will publish a final rule tomorrow making changes to the procedures for handling employment discrimination complaints against U.S. government agencies.

Critics have argued that the government is slow and ponderous in investigating discrimination accusations against itself and that years can go by without any relief for the aggrieved applicant or employee.

The procedures–codified in Part 1614 of Title 29 of the Code of Federal Regulations–were last revised in 1999. The new rules will take effect in 60 days.

In a question and answer sheet, the EEOC described the main revisions to the procedures.

  • A requirement that agency EEO programs comply with EEOC Management Directives and Management Bulletins. EEOC will review agency programs for compliance and issue notices to agencies when non-compliance is found.
  • A new subsection allowing agencies, with prior Commission approval, to conduct pilot programs whose procedural complaint processing procedures vary from the requirements of Part 1614.
  • New language stating that a complaint which alleges that a proposal or preliminary steps to take a personnel action is discriminatory can be dismissed unless the complaint alleges that the proposal is retaliatory.
  • A requirement that an agency which has not completed its investigation in a timely manner provide the complainant with written notice that the investigation is not complete, an estimated date of when the investigation will be completed, and a notice that the complainant has a current right to request a hearing or file a lawsuit.
  • A revision to the class complaint regulations making an administrative judge’s decision on the merits of a class complaint a final decision, rather than a recommended decision, which an agency can implement or appeal.
  • A requirement that agencies submit appeals and complaint files to EEOC in a digital format, unless they can establish good cause for not doing so. Complainants are encouraged to submit their documentation electronically.

Other changes include:

  • A revision allowing for expedited processing of appeals of decisions to accept or dismiss class complaints (certification decisions).
  • A revision that removes the words “Decision without a hearing” and adds instead the words “Summary Judgment.”
  • A revision which provides that EEOC appellate decisions are final for purposes of filing a civil action, unless a timely request for reconsideration is filed by either party.
  • A revision extending the time period within which agencies must provide ordered relief from 60 to 120 days.
  • A revision which distinguishes appeals alleging breach of settlement agreements from those alleging breach of final decisions. EEOC can order compliance with both settlement agreements and final decisions, and, in the case of a settlement breach, order that the complaint be reinstated from the point processing ceased.

Find out more from the EEOC’s website.