Labor & Employment News Digest - July 2009


July 2009

Managers Individually Liable for Unpaid Wages Despite Employer's Bankruptcy

Two recent cases should strike fear into the hearts of all upper-level managers and human resources professionals. In Boucher v. Shaw, the Ninth Circuit ruled that individual managers were liable for their subordinates' unpaid wages, even though the employer company filed for bankruptcy. Click here to read our full analysis on the World of Work Blog. And, earlier this month, the Washington Supreme Court reached a similar ruling based on almost identical facts in Morgan v. Kingen. For more on that case, click here to read our coverage on the World of Work Blog.

LinkedIn Debate Highlights Broader Issue of Inflated Performance Evaluations

Recently, an interesting debate has erupted in the employment law blogosphere over this National Law Journal piece cautioning employers about the risks posed by making recommendations on LinkedIn, a social networking website for professionals. The perceived danger scenario is where a manager "recommends" the work of a subordinate, who is later terminated for poor performance. The former employee then sues, and uses the manager's "recommendation" as evidence that the stated reason for the termination (poor performance) is a pretext. The debate over this issue centers on the true risk to employers of LinkedIn recommendations—some say the risk is real, others that it is overblown. We've summarized that debate and added our two cents; click here to read our analysis on the World of Work Blog.

New Website for Disability Information

The Department of Labor's (DOL) Office of Disability Employment Policy today launched a new website that may be of use to employers seeking information on how to accommodate a disabled worker. At an employer can research the applicable law and regulations, get ideas for appropriate reasonable accommodations, and locate additional resources. For example, clicking here will take you to information about accommodating deaf and hearing impaired workers. And here is useful information about tax incentives for complying with the Americans with Disabilities Act (ADA). The new site offers a myriad of social networking capabilities including a Twitter feed, RSS feeds, and a blog. The site also includes a handy multi-state guide that employers could find very useful as they work to comply with all applicable federal and state disability laws.

Online Game Educates on EFCA, Tattooing

We have a favorite new website here at the World of Work: Card Checked: The Game (sorry, Card Checked is an online game where you can play a "young and talented tattoo artist living in America where the Employee Free Choice Act (EFCA) has become the law of the land." As a player, you can dodge union organizers, withstand intimidation from pro-union co workers, and experience the anguish and horror when union thugs threaten your pet cat, Min Min. (Notably, the game includes links to documentation showing that all of these examples of union organizing tactics are real, even down to threatening pets.)

Card Checked is hosted by the Americans for Tax Reform, a conservative group, and its affiliate, the Alliance for Worker Freedom. While we're not endorsing the politics of these groups, their Card Checked site is creative and informative, and presents accurate information on how union organizing will likely be conducted if EFCA's card check and mandatory arbitration provisions become law. For more on EFCA, click here for the World of Work's EFCA coverage.

Proposed Law Would Subsidize Employers' English Classes

Last week, the proposed Strengthen and Unite Communities with Civics Education and English Skills Act (SUCCESS) was introduced in both the House and Senate during the week of July 20 that supporters say would help immigrants integrate into U.S. society and workplaces and includes tax breaks for businesses offering English literacy programs to their employees. The bill was introduced by Rep. Mike Honda (D-CA) and Sen. Kirsten Gillibrand (D-NY) and has several co-sponsors in both houses. Click here to read Rep. Honda's press release on SUCCESS. For more on the proposal and how it would work, click here to read our full story on the World of Work Blog.

Recovery of Attorney Fees for the Employer in Oregon Wage and Hour Cases

A recent Oregon Court of Appeals case, Rogers v. RGIS, LLP, presents an opportunity for employers. In Rogers, the court awarded an employer a whopping $180,854.09 in attorney fees. The plaintiff brought one lawsuit but several wage and hour claims (overtime, minimum wage, late payment of final wages, and unpaid wages for rest and meal breaks). To read how and why that could happen, read our complete coverage on the World of Work Blog.

Employers Should Keep Using 2/2/09 Version of Form I-9

The current version of Form I-9 (Employment Eligibility Verification) published February 2, 2009 has an expiration date of June 30, 2009, but there is no more current version. What's an employer to do? For now, keep using the February 2 version, says the U.S. Citizenship and Immigration Services. Need the most recent Form I-9? Click here to download the English version; click here to download the Spanish version. The World of Work Blog will let you know as soon as a new version of the form is published.

Federal Minimum Wage Rises to $7.25/Hour

If you pay your employees the minimum wage, prepare to give them a raise: the federal minimum wage increased to $7.25 per hour, effective July 24. Of course, you may live in a state that has a higher minimum wage; in that case, employers are obligated to pay the higher of the two wages. Click here for a state-by-state list of minimum wage rates.

Washington Wal-Mart Workers Get Their Wish: $35 Million

The Washington State class action by Wal-Mart employees for missed meal and rest breaks and for being forced to work off the clock finally ended this week with a payment to the workers of $35 million and $10 million to their attorneys. Wal-Mart (are you surprised?) denies any wrongdoing. For more on the lawsuit and subsequent settlement, click to read the Huffington Post's analysis or this coverage by Forbes. The settlement, which is just one of many for Wal Mart, is another important reminder that liability for wage and hour violations can really add up. And it adds up really fast when the class size is over 80,000 workers.

How Employers Can Reduce Litigation Costs

Employment litigation dominates court dockets around the country. And the swing to the left in the political arena is not likely to put a damper on the number of filings. Everyone knows that litigation is expensive. So what can the employer do to reduce its expenses if it finds itself on the receiving end of an administrative charge or a lawsuit? Click here to read the full article on the World of Work Blog.

Another Circuit Court Agrees: ADA Amendments Act Is Not Retroactive

Congress did not intend for the ADA Amendments Act (ADAAA) to be retroactive, the Court of Appeals for the District of Columbia ruled this month, and applied pre-ADAAA law to dismiss an employment discrimination claim. Click here to read the court's decision in Lytes v. DC Water and Sewer Authority. For more information on the ADAAA, click here for the World of Work's ADAAA coverage.

DOT Reinstates Observed Urination Drug Testing Rule for Safety-Sensitive Positions

This month the Department of Transportation (DOT) reinstated its rule that employers must conduct observed urination drug testing for all return-to-duty and follow-up tests for transportation workers in safety-sensitive positions. The new regulations will apply to workers in safety-sensitive positions in the aviation, motor carrier, rail, transit, maritime, and pipeline industries. Click here to read the DOT rule, which will take effect August 31. Click here to read full coverage on the World of Work Blog.

Oregon Religious Accommodation Bill Becomes Law

Last week Oregon Governor Ted Kulongoski signed Senate Bill 786, which will require employers to more extensively accommodate employees' religious practices and observances. The bill passed both the Oregon House and Senate by wide margins earlier this spring. The new law will take effect January 1, 2010. For more on how this law may affect your workplace, click here for the full story on the World of Work Blog.

Democrats Delete Card Check from EFCA

According to this article in the New York Times, Senate Democrats have dropped the controversial card check provisions from the proposed EFCA. The card check provision would have allowed unions to organize employees and begin representing them as soon as a majority of employees signed cards saying they wanted a union. Under current law, unions generally form following secret-ballot elections.

Even though the Democrats hold a 60-40 majority in the Senate, several moderate Democrats opposed the card check provision as depriving workers of the right to vote. By abandoning the card check, Democrats have all but assured the passage of some modified form of EFCA this term.

So if card check is out, what will the bill look like? A revised EFCA will replace the card check with faster election periods, giving employers less time to actively campaign against unionization efforts. Even with an apparently watered-down version of EFCA on the way, employers should be prepared to face a radically different set of federal labor laws as soon as January 1, 2010. The World of Work will continue to keep an eye on EFCA and bring you updates as they occur.

Use Workshare Programs to Cut Costs and Keep Workers

Are you looking for ways to hang onto staff yet reduce costs? Those goals are not necessarily mutually exclusive if you choose to participate in your state's workshare program. A workshare program allows your employees to collect some unemployment benefits but continue working part time. For more information on these programs, click here to read the full story on the World of Work Blog.

EEOC Issues Guidance on Severance Agreements and Waivers

Recognizing that severance agreements are becoming more and more prevalent in the down economy, the Equal Employment Opportunity Commission yesterday issued a new technical assistance document titled Understanding Waivers of Discrimination Claims in Employee Severance Agreements (click on the title to access the document). The new document is intended to help both employers and employees navigate the complexities of waivers in severance agreements.

Union Civil Wars and EFCA

The New York Times recently ran this story about internal union squabbles, which are hindering organized labor from achieving its political goals. The high-profile dispute is between the Service Employees International Union and the National Union of Healthcare Workers. What does this mean for employers and the EFCA? Click here to find out on the World of Work Blog.

Oregon Court of Appeals Upholds Employer's Right to Ask Potentially Disabled Employees to Take Medical Exams

Earlier this month in Heipel v. Henderson et al., the Oregon Court of Appeals affirmed summary judgment on an Oregon disability discrimination claim in favor of an employer who asked an employee to take an independent medical exam as part of an investigation into the employee's disturbing work-related behavior. The court confirmed that such exams must be "job related and consistent with business necessity," and that the exam in this case met those criteria. For more on this case and how it may affect your workplace, click here for our complete analysis on the World of Work Blog.

Bus Driver's "Shy Bladder Syndrome" a Disability

A school bus driver who was demoted after his "shy bladder syndrome" left him unable to comply with his employer's drug testing procedures may proceed with claims under the ADA according to a recent ruling from a Tennessee federal court. Click here to read our coverage and analysis on the World of Work Blog.

ICE Targets Employers by Launching I-9 Audit Program

Implementing a new audit initiative, the U.S. Immigration and Customs Enforcement Service (ICE) has served Notices of Inspection on 652 businesses nationwide. The notices inform employers that ICE will be inspecting their I-9s and other employment records to ascertain whether the employers are in compliance with federal immigration laws and regulations.

The Obama administration appears to be taking a new approach to immigration law compliance by focusing its enforcement activities on employers. Under the Bush administration, ICE was known for sending armed agents into workplaces to round up employees suspected of working illegally. According to this press release issued by ICE, the new strategy is to dedicate resources to auditing and investigating employers in order to reduce the demand for illegal employment.

The 652 Notices of Inspection served last week exceed the total number of notices that ICE served in all of 2008. It appears that these notices are just the first wave of employer audits. In light of ICE's increased auditing activities, now is the time to conduct your own internal audit and ensure that you have proper immigration compliance measures in place.

Al Franken and EFCA

After months of litigation, Al Franken has been declared the winner of the Senate race in Minnesota. He will be the 60th Democrat in the Senate, which could enable the Democrats to override a filibuster in the Senate. So the question becomes where does Senator Franken stand on EFCA? Just as a reminder, this is the bill that gives unions the right to organize by showing that a majority of employees signed cards, and it basically does away with secret ballot elections. Click here to read our analysis and to watch a very unfunny video of Senator Franken speaking on EFCA, all on the World of Work Blog.

Seventh Circuit Rules FLSA Doesn't Protect Verbal Complaints

Most employment lawyers and HR professionals know that firing an employee for making a complaint about being paid properly is a recipe for disaster. This month in Kasten v. Saint-Gobain Performance Plastics Corp., the Seventh Circuit Court of Appeals thought differently, at least for verbal complaints about violations of the Fair Labor Standards Act (FLSA). To read what we think this means for employers, click here to read the complete story on the World of Work Blog.

DOL Secures $3.4 Million Settlement for NY Car Wash Employees

A portend of things to come in federal wage enforcement? Earlier this month, a group of New York car washes agreed to pay over one thousand current and former employees a total of $3.4 million to settle a lawsuit filed by the DOL alleging violations of the FLSA. Click here to read the consent decree in Solis v. LMC et al.

Supreme Court Agrees to Hear Case About Meddling International Union

The U.S. Supreme Court this month agreed to hear a case asking just how much international unions will be allowed to meddle in the affairs of their local affiliates. In Granite Rock Co. v. Teamsters, the employer sued the International Brotherhood of Teamsters in federal court claiming that the International interfered with the relationship between the employer and the Local Teamsters union. For more on the case and how this may affect union-management relations, click here for the full story on the World of Work Blog.

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