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November 20, 2014

Employment-First Circuit Holds That Plaintiffs Are Highly Compensated Employees And Therefore Are Not Entitled To Overtime

In Litz v. The Saint Consulting Group, Inc., No. 13-2437 (1st Cir. 2014), the plaintiffs Crystal Litz and Amanda Payne ("plaintiffs") claim unpaid overtime wages for their work as project managers for The Saint Consulting Group, Inc. ("SaintConsulting"). The district court concluded that plaintiffs were "highly compensated employees" and thus exempt from the overtime pay protections of the Fair Labor Standards Act ("FLSA"). 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.601. The plaintiffs appeal.

After analyzing the case, the First Circuit Court of Appeals (the "Court") concluded that the district court was correct and affirmed the decision. Why? The Court noted that the FLSA requires employers to pay nonexempt employees at a higher rate for hours worked beyond 40 hours in a week. 29 U.S.C. § 207(a)(1). The FLSA exempts from its overtime protection any employee employed in a bona fide executive, administrative, or professional capacity. Id. § 213(a)(1). The FLSA implementing regulations further provide that this exemption applies to "highly compensated employees" who (1) customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee; (2) receive at least $100,000 in total annual compensation; and (3) receive at least $455 per week paid on a salary or fee basis. 29 C.F.R. § 541.601(a), (b)(1). Saint Consulting argues, and the district court agreed, that the plaintiffs satisfied these three requirements. The plaintiffs concede that they satisfied the duties requirement and earned well over $100,000 annually during the relevant time period, but they argue that they were not paid any amount "on a salary ... basis" due to a $1,000 stipend paid each week that their hours were below a certain level.

The Court continued by saying that the stipend was paid on a "salary basis" if it was (1) a predetermined amount, (2) constituting all or part of the employee's compensation, and (3) not subject to reduction because of variation's in the quality or quantity of the work performed. Id. § 541.602(a). The facts establish that these conditions are met, and the Court concluded that the plaintiffs are highly compensated employees, not eligible for overtime.

October 15, 2014

Employment-Eighth Circuit Rules That Federal And State Claims Fail Because The Plaintiff Was An Independent Contractor

In Alexander v. Avera St. Luke's Hospital, No. 13-2592, (8th Cir. 2014), pathologist Larry Alexander ("Alexander") suffered a heart attack in March 2008, underwent a heart transplant in May 2009, and was hospitalized for bipolar disorder in October 2010. In August 2011, Avera St. Luke's, a non-profit corporation operating St.Luke's Hospital in Aberdeen, South Dakota ("Avera"), terminated its December 2008 Pathology Services Agreement with Dr. Alexander, invoking the provision that either party may terminate the Agreement with or without cause on ninety days prior written notice. Alexander brought this action against Avera, alleging violations of the Americans with Disabilities Act ("ADA"), the Age Discrimination in Employment Act ("ADEA"), the Family and Medical Leave Act ("FMLA"), and the South Dakota Human Relations Act ("SDHRA"). The district court granted Avera's motion for summary judgment, concluding that each of these statutory claims failed because undisputed material facts demonstrated that Alexander was an independent contractor rather than an Avera employee. Alexander appeals.

After analyzing the case, the Eighth Circuit Court of Appeals (the "Court") agreed that Alexander was an independent contractor when performing under the Pathology Services Agreement, and affirmed the district court's holding. Why? The Court said that Alexander appeals the dismissal of his statutory claims that Avera violated his rights under the ADA, ADEA, FMLA, and SDHRA. Each of these statutes limits its protections to "employees." Independent contractors are not covered. Although the analysis differs somewhat under each statute, based generally on the test in Nationwide Mut. Ins. v. Darden (Supreme Court 1992), the Court concluded that Alexander is an independent contractor, because:

-- Avera had no right to control the specific manner in which Alexander rendered pathology services;

-- Avera did not provide Alexander with benefits or malpractice insurance;

--Avera did not withhold income and FICA taxes from Alexander's monthly compensation and reported his income on a Form 1099, and Alexander reported his compensation as the income of a self-employed independent contractor; and

-- Alexander had the contractual right to hire substitute pathologists and assistants at his own expense (including his wife), had no weekly hours requirement, was never assigned duties not specified in his contract, held other medical employment during much of his time at Avera, and was never bound by a non-compete agreement.

October 1, 2014

Employment-Seventh Circuit Rules That Plaintiff Is Covered By The FMLA

In Cuff v. Trans States Holdings, Inc., No. 13-1241 (7th Cir. 2014), the Seventh Circuit Court of Appeals (the "Court") was faced with the question of whether the plaintiff, Darren Cuff ("Cuff"), who was on the payroll of Trans States Airlines ("Trans States"), was covered by the Family and Medical Leave Act (the "FMLA").

The Court noted that, in this case, United Airlines contracts with other firms for regional air services under the "United Express" brand. Trans States Holdings ("Holdings") is one of United's suppliers. It owns two air carriers: Trans States and GoJet Airlines ("GoJet"). The FMLA applies only if the employer has at least 50 employees within 75 miles of a given worker's station. 29 U.S.C. §2611(2)(B)(ii). Cuff worked at O'Hare Airport in Chicago. The parties agree that in January 2010, when it fired Cuff after he took leave despite its denial of his request under the FMLA, Trans States had 33 employees at or within 75 miles of O'Hare, while GoJet had 343 and Holdings had none. Cuff contends that he worked for Trans States and Go-Jet jointly.

The Court also noted that the Department of Labor has issued a regulation, providing that workers are covered by the FMLA when they are jointly employed by multiple firms that collectively have 50 or more workers. 29 C.F.R. §825.106(a). A separate regulation adds that two or more firms may be treated as a single employer when they operate a joint business. 29 C.F.R. §825.104(c). Cuff invoked both of these provisions. The two lead factors identified by regulation §825.106(a), in determining whether there is joint employment, is whether "there is an arrangement between employers to share an employee's services" and whether "one employer acts directly or indirectly in the interest of the other employer in relation to the employee". The Court found that, in Cuff's case, both questions are answered "yes," and it concluded that Cuff was a joint employee of at least Trans States and GoJet, if not of Holdings too. Combining those entities allows Cuff to meet the 50 workers threshold, so that Cuff is covered by the FMLA.

September 19, 2014

Employment-Third Circuit Holds That Employee Has Established A Prima Facie Case of Interference and Retaliation Under The FMLA

In Budhun v. Reading Hospital and Medical Center, No. 11-4625 (3rd Cir. 2014), the plaintiff, Vanessa Budhun ("Budhun"), was appealing the district court's summary judgment in favor of her employer, the Reading Hospital and Medical Center ("Reading"), on her Family Medical Leave Act ("FMLA") interference and retaliation claims.

In this case, in accordance with applicable law, Reading provides its employees with up to twelve weeks of job-protected FMLA leave during any rolling twelve-month period. Reading requires employees to submit a leave certification from a healthcare professional prior to approving any FMLA leave. It also requires employees to submit a "fitness-for-duty" certification in the form of a return to work form that confirms that the employee can work "without restriction" before returning. If an employee does not contact Reading's human resources department at the end of his or her leave, Reading's policy states that it will consider the employee to have voluntarily resigned.

After taking FMLA leave due to a broken finger, and failing to inform Reading human resources at the end of the leave, Reading terminated Budhun. This suit ensued. In analyzing the case, the Third Circuit Court of Appeals (the "Court") noted that FMLA guarantees an employee the right to return to work, the right allegedly being interfered with. The Court said that, although we have never had occasion to address specifically what constitutes invocation of one's right to return to work, Budhun has adduced enough evidence such that a reasonable jury could find that she did so here, and that Reading interfered with her rights when they did not let her return.. She submitted a "fitness-for-duty" certification, which clearly stated that she could return to work with "no restrictions." Under the FMLA regulations, prior to permitting an employee to return to work, an employer, as Reading did here, may request that an employee provide such a certification. In it, an employee's healthcare provider must merely certify that the employee is able to resume work. Budhum met these requirements, establishing a prima facie case of interference under the FMLA.

Next, the Court dealt with Budhun's retaliation claim. Budhun argues that Reading retaliated against her for taking FMLA leave when it impermissibly replaced her with another employee after her FMLA-protected leave expired. Budhun's claim is based on circumstantial evidence. Thus, to succeed on her claim, it is her burden to establish that (1) she invoked her right to FMLA-qualifying leave, (2) she suffered an adverse employment decision, and (3) the adverse action was causally related to her invocation of rights. The record indicates that that Budhun made out these elements, meeting element (2) by alleging that she was replaced her with another employee and meeting element (3) by alleging that Reading had decided to replace her prior to the end of her FMLA leave, and actually replaced her just two days after the leave ended. This at least established a prima facie case of retaliation under the FMLA.
As such, the Court overturned the district court's grant of summary judgment, and remanded the case back to the district court.

September 16, 2014

Employment-Sixth Circuit Rules That Damages In The Amount of $173,000 May Be Awarded For An FMLA Violation

In Wallace v. FedEx Corporation, Nos. 11-5500, 5577 (6th Cir. 2014), the following obtained. The plaintiff, Tina Wallace ("Wallace"), worked for the defendant, FedEx Corporation ("FedEx"). By the summer of 2007, Wallace had developed a variety of health problems that required her to take leave from her job. FedEx offered Wallace leave under the Family and Medical Leave Act ("FMLA"), and its representatives verbally asked her to complete a medical-certification form. FedEx, however, never explained the consequences of not returning a completed form. Wallace failed to provide FedEx with the medical certification, and once she was absent for two consecutive days after the form was due, FedEx terminated her employment.

Wallace filed suit under the FMLA, alleging that FedEx interfered with her rights under the statute. A magistrate judge dismissed Wallace's request for liquidated damages and front pay, but after a trial, the jury sided with Wallace on the issues of liability and back pay, awarding damages in the amount of $173,000. Both parties filed post-judgment motions, and the magistrate judge denied all of them, except to reduce Wallace's damages award to $90,788. The question for the Sixth Circuit Court of Appeals (the "Court"): Should the original damage award of $173,000 be restored?

The Court concluded that the $173,000 damages award should be restored. Why? The issue is one of procedure. Having found that the magistrate judge had granted a Rule 59 motion for remittitur, the Court said that the magistrate judge then committed procedural error by not offering Wallace the option of a new trial on damages. Therefore, the Court must reverse the magistrate judge's decision to reduce the damages award.

September 10, 2014

Employment-EEOC Issues Fact Sheet for Small Businesses Discussing Pregnancy Discrimination, Including Effect On Benefits

The Equal Employment Opportunity Commission (the "EEOC") has issued a Fact Sheet discussing pregnancy discrimination. The Fact Sheet is being issued by the EEOC, along with Enforcement Guidance on Pregnancy Discrimination and FAQs on the Enforcement Guidance. The Fact Sheet is here.

This document explains the requirements of the Pregnancy Discrimination Act (the "PDA"), as well as the requirements of Title I of the Americans with Disabilities Act (the "ADA") as it applies to women with pregnancy-related disabilities. The PDA and ADA apply to employers with 15 or more employees.

As to employee benefits and matters, the Fact Sheet says:

In General. The PDA requires that a covered employer treat women affected by pregnancy, childbirth, or related medical conditions in the same manner as other applicants or employees who are similar in their ability or inability to work. The PDA covers all aspects of employment, including firing, hiring, promotions, and fringe benefits (such as leave and health insurance benefits). Pregnant workers are protected from discrimination based on current pregnancy, past pregnancy, and potential pregnancy.

An employer may not discriminate against an employee because of a medical condition related to pregnancy and must treat the employee the same as others who are similar in their ability or inability to work but are not affected by pregnancy, childbirth, or related medical conditions. For example, under the PDA, since lactation is a medical condition related to pregnancy, an employer may not discriminate against an employee because of her breastfeeding schedule. (For information about a provision of the Patient Protection and Affordable Care Act that provides additional protections for breastfeeding employees, see the section on "Other Federal Laws Protecting Pregnant Workers" below.).

Benefits At Work. An employer must provide the same benefits of employment to women affected by pregnancy, childbirth, or related medical conditions that it provides to other persons who are similar in their ability or inability to work. The PDA requires employers who offer health insurance to include coverage of pregnancy, childbirth, and related medical conditions. An employer must provide the same terms and conditions for pregnancy-related benefits as it provides for benefits relating to other medical conditions.

September 9, 2014

Employment-Ninth Circuit Rules That Fed Ex Drivers Are Employees (And Not Independent Contractors)

In Alexander v. Fed Ex Ground Package System, Inc., Nos. 12-17458, 12-17509 (9th Cir. 2014), as a central part of its business, FedEx Ground Package System, Inc. ("FedEx"), contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx's appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx's consent. The question for the Ninth Circuit Court of Appeals (the "Court"): under California Law, are the drivers employees or independent contractors? At stake were unpaid employment expenses and unpaid wages that would be due employees under state law.

In analyzing the case, the Court noted that California law controls this dispute. Further, determinations of employment status under California law are governed by the right-to-control test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (Cal. 1989). The Court found that Fed Ex policy grants FedEx a broad right to control the manner in which its drivers' perform their work. This is the most important factor of the right-to-control test, and it strongly favors employee status. The other factors of the test, i.e., the right to terminate at will, integration of the work into the business, performing work under the principal's supervision, the required skills, provision of tools and equipment, length of time working for the principal, method of payment, and the parties' beliefs, do not strongly favor either employee status or independent contractor status. Accordingly, the Court held that the drivers are employees as a matter of law under California's right-to-control test.

The Court came to basically the same conclusion as to the Fed Ex drivers under Oregon law in Slayman v. Fed Ex Ground Package System, Inc., Nos. 12-35525, 12-35559 (9th Cir. 2014).

August 19, 2014

Employment-Third Circuit Rules That Mailbox Rule Presumption, Of Receipt By Employee Of A Letter Designating Her Absence As FMLA Leave, Is Not Sufficient To Support Summary Judgment Against Employee's FMLA Claims

In Lupyan v. Corinthian Colleges Inc., No. 13-1843 (Third Circuit 2014), Lisa Lupyan ("Lupyan") was appealing the summary judgment rendered by the district court in favor of her former employer, Corinthian Colleges, Inc. ("CCI") on her claims of interference with the exercise of her rights under the Family and Medical Leave Act (the "FMLA" ) and retaliation for her exercise of those rights.

In this case, Lupyan was hired as an instructor in CCI's Applied Science Management program in 2004. In December 2007, in response to the suggestion by her supervisor that she take leave from work since she looked depressed, Lupyan filed a Request for Leave Form. CCI's human resources department determined that Lupyan was eligible for leave under the FMLA.

On December 19, 2007, Sherri Hixson, CCI's Supervisor of Administration, met with Lupyan and instructed her to initial the box marked "Family Medical Leave" on her Request for Leave Form. Hixson also changed Lupyan's projected date of return to April 1, 2008, based upon the Certification of Health Provider provided by Lupyan. Lupyan contends--and CCI does not dispute --that her rights under the FMLA were never discussed during this meeting. However, later that afternoon CCI allegedly mailed Lupyan a letter advising her that her leave was designated as FMLA leave, and further explaining her rights under that act (the Letter"). Lupyan denies ever having received the Letter, and denies having any knowledge that she was on FMLA leave until she attempted to return to work.

Lupyan did not return to work by April 1, 2008. She was advised, on April 9, 2008, that she was being terminated from her position at CCI due to low student enrollment, and because she had not returned to work within the twelve weeks allotted for FMLA leave. Lupyan claims this was the first time she had any knowledge that she was on FMLA leave. This suit ensued, with Lupyan claiming that CCI interfered with her rights under the FMLA by failing to give notice that her leave fell under that act, and that she was fired in retaliation for taking FMLA leave.

In analyzing the case, the Third Circuit Court of Appeals (the "Court") noted that the FMLA regulations require an employer give to employees individual written notice that an absence falls under the FMLA, and is therefore governed by it. 29 CFR § 825.208. Failure to provide the required notice can constitute an interference claim. Here, Lupyan claims that CCI interfered with her FMLA rights by not informing her that her leave was under the FMLA. According to her, she therefore was unaware of the requirement that she had to return to work within twelve weeks or be subject to termination.
The issue in this case is whether Lupyan received the Letter. The law contains a presumption of receipt under the "mailbox rule". Under this rule, if a letter properly directed is proved to have been either put into the post-office or delivered to the postman, it is presumed that it reached its destination at the regular time, and was received by the person to whom it was addressed. However, this is only a rebuttable presumption. Given Lupyan's denial that the Letter was received, and the ease with which a letter can be certified, tracked, or proof of receipt obtained in order to prove delivery, that rebuttable presumption is not sufficient to establish receipt as a matter of law and thereby entitle CCI to summary judgment. Accordingly, given certain consideration about the interference and retaliation claim, the Court reversed the district court's summary judgment, and remanded the case back to the district court.

July 30, 2014

Employment- Second Circuit Rules That Entry-Level Accountants At KPMG Are Exempt From FLSA Overtime Requirements

In Pippins v KPMG LLP, Docket No. 13-889-cv (2nd Cir. 2014), the plaintiffs had sued KPMG LLP ("KPMG") for unpaid overtime wages under the Fair Labor Standards Act ("the FLSA"), 29 U.S.C. §§ 201‐219. The district court granted KPMG's motion for summary judgment on the ground that plaintiffs, employed as entry‐level accountants doing auditing work, were learned professionals exempt from the FLSA's overtime provisions under 29 U.S.C. § 213(a)(1).

In analyzing the case, the Second Circuit Court of Appeals (the "Court") said that the record reveals that plaintiffs were employed in a field of science and learning, that they relied on knowledge customarily acquired by prolonged specialized instruction, and that their work involved consistent exercise of professional judgment, see 29 C.F.R. § 541.301. The Court concluded, therefore, that the plaintiffs were learned professionals. Accordingly, the Court affirmed the district court's judgment.

July 10, 2014

Employment-Seventh Circuit Rules That Employee Does Not Forfeit FMLA Rights By Failing To Tell Employer How Much Leave She Will Take

Gienapp v. Harbor Crest, No. 14-1053 (7th Cir. 2014) involved the following situation. Suzan Gienapp worked at Harbor Crest, a residential nursing care facility in Fulton, Illinois. In January 2011 she told Myra Chattic, its top manager, that she needed time off to care for her daughter, who was undergoing treatment for thyroid cancer. Chattic granted leave under the Family and Medical Leave Act (the "FMLA"). Employees are entitled to as much as 12 weeks' unpaid leave annually to care for children with serious health conditions. 29 U.S.C. section 2612(a)(1). Harbor Crest acknowledges that Gienapp's daughter had a serious health condition, a term defined in §2611(11). While on leave, Gienapp mailed in an FMLA form, leaving blank a question about the leave's expected duration.

Harbor Crest did not ask her to fill in the blank on the form, nor did it pose written questions as the 12-week period progressed. A physician's statement on the form said that the daughter's recovery was uncertain, and that if she did recover she would require assistance at least through July 2011. Chattic inferred from this that Gienapp would not return by April 1, her leave's outer limit, and in mid February Chattic hired someone else in her stead. When Gienapp reported for work on March 29, Chattic told her that she no longer had a job. After the exhaustion of administrative remedies, this litigation followed, with Gienapp alleging a violation of her rights under the FMLA. The district court granted defendants' motion for summary judgment, ruling that Gienapp had forfeited her rights under the FMLA by not telling Harbor Crest exactly how much leave she would take. Gienapp appeals.

In analyzing the case, the Seventh Circuit Court of Appeals (the "Court") said that the statute requires notice to the employer of the need for leave. Gienapp gave notice; Chattic granted leave; Harbor Crest knew that it was governed by the FMLA. What Gienapp did not do was provide a date when she expected to return to work, though the form called for that information
.
The Court said further that Gienapp's application is covered by the FMLA regulation at §825.303, which deals with unforeseeable leave, the type of leave at issue here. And §825.303 does not require employees to tell employers how much leave they need, if they do not know yet themselves. Instead of requiring notice at the outset, §825.303(c) tells workers to comply with employers' policies. Harbor Crest told Gienapp to call in monthly, and it is conceded that she did so. If Harbor Crest asked for any extra information during those calls, the record does not reflect undisputed details; we assume therefore that Gienapp complied with Harbor Crest's policies. The Court concluded that Harbor Crest is not entitled to summary judgment on a theory that Gienapp failed to provide essential information. Rather, the Court ruled that Gienapp is entitled to summary judgment in her favor. It reversed the judgment of the district court, and remanded the case with instructions for the district court to craft an appropriate remedy.

July 7, 2014

Employment-Tenth Circuit Holds That Sick Leave Exceeding Six Months Is Not A Reasonable Accommodation

In Hwang v. Kansas State University, No. 13-307 (10th Cir 2014), the Court faced the issue of whether an employer could face liability under the Rehabilitation Act (the Public School equivalent of the Americans With Disabilities Act (or, the "ADA")) for denying an employee sick leave exceeding 6 months.

In this case, Grace Hwang, an assistant professor at Kansas State University, signed a written one-year contract to teach classes over three academic terms (fall, spring, and summer). But before the fall term began, Ms. Hwang received news that she had cancer and needed treatment. She sought and the University gave her a six-month (paid) leave of absence. As that period drew to a close and the spring term approached Ms. Hwang's doctor advised her to seek more time off. She asked the University to extend her leave through the end of spring semester, promising to return in time for the summer term. But according to Ms. Hwang's complaint, the University refused, explaining that it had an inflexible policy allowing no more than six months' sick leave. The University did arrange for long-term disability benefits, but Ms. Hwang alleges it effectively terminated her employment. In response, she filed this lawsuit contending that by denying her more than six months' sick leave the University violated the Rehabilitation Act. Failing to see how this much followed, the district court dismissed her complaint. Ms. Hwang appeals the dismissal.

In analyzing the case, the Tenth Circuit Court of Appeals (the "Court") noted that the Rehabilitation Act prohibits recipients of federal funding, like Kansas State, from discriminating on the basis of disability. One way a disabled plaintiff can establish a claim for discrimination in the workplace is by showing that she is qualified for her job; that she can perform the job's essential functions with a reasonable accommodation for her disability; and that her employer failed to provide a reasonable accommodation despite her request for one. Once a plaintiff can show all these things, an employer generally may avoid liability only if it can prove the accommodation in question imposes an undue hardship on its business. In this case, Ms. Hwang was not able to perform the essential functions of her job, even with a reasonable accommodation. By her own admission, she couldn't work at any point or in any manner for a period spanning more than six months. The Court said that an employee who is not capable of working for so long is not an employee capable of performing a job's essential functions -- and that requiring an employer to keep a job open for so long does not qualify as a reasonable accommodation. A six month leave is too long to be considered a reasonable accommodation. Accordingly, the Court concluded that Ms. Hwang did not state a claim of discrimination, and it affirmed the district court's decision.

June 24, 2014

Employment-DOL Will Revise Definition Of Spouse Under FMLA To Comply With Windsor

An email from the U.S. Department of Labor (the "DOL") tells me that the DOl's Wage and Hour Division has announced a Notice of Proposed Rulemaking (an "NPRM") to revise the definition of spouse under the Family and Medical Leave Act of 1993 (the "FMLA") in light of the United States Supreme Court's decision in United States v. Windsor, which found section 3 of the Defense of Marriage Act ("DOMA") to be unconstitutional.

According to the email, the NPRM proposes to amend the definition of spouse so that eligible employees in legal same-sex marriages will be able to take FMLA leave to care for their spouse or family member, regardless of where they live. More information is available at the Wage and Hour Division's FMLA NPRM Website.

May 8, 2014

Employment-Eighth Circuit Holds That, Of The Three Plaintiffs, Two Fail To Meet the Executive Emption From FLSA Overtime Requirements, While One Meets This Exemption And Need Not Be Paid Overtime Under The FLSA

In Madden v. Lumber One Home Center, Inc., No. 13-2214 (8th Cir. 2014), three former employees of Lumber One Home Center, Inc. ("Lumber One"), a lumberyard in Mayflower, Arkansas, filed suit against the company. The employees claimed Lumber One incorrectly classified them as executive employees who were exempt from overtime pay regulations under the Fair Labor Standards Act (the "FLSA"). In the district court, the jury found that all three plaintiff-employees worked in an executive capacity and were therefore not entitled to recover overtime wages. Following trial, the plaintiffs moved for judgment as a matter of law, which the district court granted. After overturning the jury verdict, the district court awarded the plaintiffs overtime pay and attorneys' fees. Lumber One appeals.

In analyzing the case, the Eighth Circuit Court of Appeals (the "Court") said that the employer has the burden to prove that its employee is an executive and therefore exempt from the FLSA's overtime pay requirements. The Court determines whether an employee meets the executive exemption by applying Department of Labor ("DOL") regulations, which state in pertinent part:

(a) The term `employee employed in a bona fide executive capacity' in section 13(a)(1) of the [FLSA] shall mean any employee:
(1) Compensated on a salary basis at a rate of not less than $455 per week... exclusive of board, lodging or other facilities;
(2) Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
(3) Who customarily and regularly directs the work of two or more other employees; and
(4) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.
29 C.F.R. § 541.100.

The Court then said that issue in this case is whether the plaintiffs meet element (4). The district court had found that Lumber One presented no evidence that the plaintiffs had the authority to make personnel decisions or that the company gave their hiring recommendations particular weight. Examining the evidence, the Court concluded that Lumber One failed to present any evidence which shows that two of the plaintiffs-Madden and O'Bar- met the element (4). However, the Court concluded that Lumber One did prove that the third plaintiff-Wortman- met element (4) and thus was eligible for the executive exemption. Lumber One did present sufficient evidence to allow a jury to conclude that Wortman provided a recommendation for at least one employee and that Lumber One relied on that recommendation when deciding to hire the applicant. Thus the Court upheld the district court's judgment as to Madden and O'Bar, while it reversed the judgment as to Wortmen.

May 6, 2014

Employment-Sixth Circuit Rules That Telecommuting May Be A Reasonable Accommodation Under The ADA

In Equal Employment Opportunity Commission v. Ford Motor Company, No. 12-2484 (6th Cir. 2014), the issue was whether a telecommuting arrangement could be a reasonable accommodation for an employee suffering from a debilitating disability. Charging party Jane Harris ("Harris") was terminated from her position as a resale steel buyer at Ford Motor Co. ("Ford"), after she asked to telecommute several days per week in an attempt to control the symptoms of irritable bowel syndrome ("IBS"). The Equal Employment Opportunity Commission ("EEOC") argues that Ford discriminated against Harris on the basis of her disability and retaliated against her for filing a charge with the EEOC. The district court granted summary judgment in favor of Ford, and Harris appeals.

In analyzing the case, the Sixth Circuit Court of Appeals (the "Court") said that, under the Americans With Disabilities Act (the "ADA"), an employer discriminates against an employee if it does not make "reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or an employee, unless [the employer] can demonstrate that the accommodation would impose an undue hardship on the operation of the business. "42 U.S.C. § 12112(b)(5). Harris is indisputably disabled under the ADA, and has provided evidence to establish that she is "otherwise qualified" for her position at Ford. Further the EEOC can demonstrate that Harris was qualified for the resale buyer position with a reasonable accommodation for her disability, namely a telecommuting arrangement. But is telecommuting a "reasonable accommodation"?

The Court continued by saying that it has previously concluded that telecommuting is not a reasonable accommodation for most jobs. However, there may be unusual cases when telecommuting is reasonable because the employee can effectively perform all work-related duties at home. In this case, the EEOC has presented sufficient evidence to create a genuine factual dispute as to whether Harris is one of those employees who can effectively work from home, and Ford has not shown that such arrangement would create undue hardship for Ford.

Further, as to the claim of retaliation, the EEOC evidence creates a genuine dispute as to whether Ford was truly motivated by retaliatory intent or by a reasoned business decision to terminate an underperforming employee. This is

April 24, 2014

Employment-Fourth Circuit Rules That County Retirement Plan Violates ADEA, As It Determines Employee Contribution Rates Based On Age

In Equal Employment Opportunity Commission v. Baltimore County, No. 13-1106 (4th Cir. 2014), the Court was asked to consider whether an employee retirement benefit plan (the "Plan") maintained by Baltimore County, Maryland (the "County") unlawfully discriminated against older County employees based on their age, in violation of the Age Discrimination in Employment Act (the "ADEA). The challenged plan provision involved the different rates of employee contribution to the plan, which required that older employees pay a greater percentage of their salaries based on their ages at the time they enrolled in the Plan. The district court concluded that the plan violated the ADEA, and granted summary judgment against the County on the issue of liability. The County appeals.

In analyzing the case, the Fourth Circuit Court of Appeals (the "Court") determined that the district court correctly determined that the County's plan violated the ADEA, because the plan's employee contribution rates were determined by age, rather than by any permissible factor. The Court further concluded that the ADEA's "safe harbor provision" applicable to early retirement benefit plans does not shield the County from liability for the alleged discrimination. Accordingly, the Court affirmed the district court's award of summary judgment on the issue of liability, and remanded the case for consideration of damages.

In analyzing the case, the Court noted that the ADEA prohibits discrimination with respect to "compensation, terms, conditions, or privileges of employment," which includes "all employee benefits, including such benefits provided pursuant to a bona fide employee benefit plan." 29 U.S.C. §§ 623(a)(1), 630(l). Accordingly, it generally is unlawful for an employer to maintain a retirement benefit plan that treats older employees in the protected age group differently from younger employees, unless the differentiation "is based on reasonable factors other than age." 29 U.S.C. § 623(f)(1).

In the present case, the EEOC alleged that the Plan was facially discriminatory. A policy that explicitly discriminates based on age violates the ADEA. The Plan mandated different contribution rates that escalated explicitly in accordance with employees' ages at the time of their enrollment in the Plan. The Court found no merit in the County's argument that the employee contribution rates lawfully were based on a reasonable factor other than age, such as the "time value of money." The Court said that it's conclusion is not altered by the County's reliance on the ADEA's "safe harbor provision" in 29 U.S.C. § 623 (l)(1)(A)(ii)(I). As relevant to this appeal, that provision states that "it shall not be a violation" of the ADEA "solely because" a retirement benefit plan "provides for . . . payments [by the employer] that constitute the subsidized portion of an early retirement benefit. . . ." Id. The Court said that the safe harbor provision is not a defense to the challenged disparate treatment. The safe harbor provision permits an employer to subsidize early retirement benefits without violating the ADEA. However, the provision does not address employee contribution rates nor does it permit employers to impose contribution rates that increase with the employee's age at the time of plan enrollment. Thus, the Court concluded that the safe harbor provision is inapplicable here.