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.



Federal Employees Gain Ground on Same-Sex Benefits

Someday it won’t be news anymore that couples in same-sex relationships and their families are treated the same under the law as their heterosexual counterparts. The U.S. government on Friday took another step toward that destination.

The Obama administration issued regulations allowing employees in same-sex households more of the benefits that other federal employees now enjoy.

For example, the rules will allow low-income workers to obtain child-care subsidies for children of same-sex domestic partners and permit domestic partners to participate in employee assistance programs.

Other granted benefits include:

  • evacuation pay to cover same-sex partners in overseas emergencies;
  • the right of a same-sex spouse to choose an “insurable interest” option at retirement, such as an survivor annuity;
  • eligibility of same-sex domestic partners for noncompetitive U.S. government jobs upon returning from an overseas posting.

Legislation pending in Congress would provide same-sex domestic partners federal employee fringe benefits, such as health and life insurance and retirement benefits. The Domestic Partnership Benefits and Obligations Act was approved by a Senate committee, but is unlikely to get any further in this legislative session.

Cut the Cheese: Mozorrella Manufacturer Settles Charges With OFCCP

One of the largest manufacturers of mozorrella cheese has settled a complaint by the Office of Federal Contract Compliance Programs of systemic hiring discrimination at one of its facilities.

The OFCCP said in a press release that Leprino Foods settled the government’s allegations that its use of a pre-employment test called WorkKeys to select hires for on-call laborer positions resulted in discrimination against African-American job applicants and applicants of Asian and Hispanic descent.

According the OFCCP, which enforces nondiscrimination requirements against federal contractors and subcontractors, the administration of the WorkKeys exam had an adverse impact on minority job  applicants for these specific positions. The agency further determined that the  exam was not job-related, as it tested applicants’ skills in mathematics,  locating information and observation – skills that are not critical to the  entry-level tasks performed by on-call laborers, such as inspecting products,  monitoring equipment and maintaining sanitation at the facility.

Under  the terms of the settlement, Leprino will pay $550,000 in back wages,  interest and benefits to 253 minority workers who were rejected for on-call laborer  positions between January 2005 and October 2006 because they failed the  WorkKeys exam. Additionally, the company has agreed to discontinue use of the  test for this purpose, hire at least 13 of the original class members, undertake  extensive self-monitoring measures and immediately correct any discriminatory  practices.

Leprino Foods is one of the largest  producers of mozzarella cheese in the world and is based in Denver, Colo., the OFCCP said.  Since 2005, the company has received contracts totaling nearly $50 million from  U.S. Department of Agriculture’s Farm Services Agency to provide mozzarella and  other dairy products to the federal government.

Read more.

Temporary Staffing Agency Must Comply With EEOC Subpoena In Literacy Rule Challenge, 4th Circuit Holds

It’s not a good idea to come between the Equal Employment Opportunity Commission and its subpoena authority. Most of the time, the employer is going to lose that battle.

Latest evidence of that. The U.S. Court of Appeals for the Fourth Circuit ruled July 18 that the temporary staffing agency Randstad must comply with an EEOC subpoena investigating whether its English literacy requirement violates Title VII of the 1964 Civil Rights Act or the Americans With Disabilities Act.

In this case, Kevin Morrison, a resident of Maryland,  who was born in Jamaica and does not read or write in English, filed an EEOC charge alleging Ranstad terminated him under the English-only rule. At first he alleged violation of Title VII, but then filed an amended charge adding the ADA claim, alleging he was fired because he had a learning disability.

The EEOC served a subpoena on Ranstad demanding documents not only from the particular branch office that supposedly terminated him but also for all “nonadministrative position assignments” made by its 13 Maryland offices from 2005 through 2009.

The federal district court, however, refused to enforce the subpoena. It ruled that the Title VII charge was not a proper basis for enforcement, since the literacy requirement had nothing to with national origin. The ADA allegation also was not a proper grounds for enforcment, the court explained, because it did not “relate back” to the Title VII charge.

Reversing, the appeals court said it would defer to the EEOC’s interpretation of a regulation as permitting relation back of the amended charge. Furthermore, the court said, the amended charge triggered the EEOC’s subpoena enforcement authority under the ADA.

I’d summarize the outcome this way: Heads, the EEOC wins; tails the employer loses.

Here’s the full opinion.