Labor and Employment Law Alert


10/1/2000

In the spirit of the season, the courts and the National Labor Relations Board ("NLRB") have issued some scary decisions in recent weeks that will have a significant impact on the workplace. This October 2000 Labor & Employment Alert summarizes the practical effects of the two most significant decisions and also highlights the Equal Employment Opportunity Commission's (the "EEOC") compliance guidelines issued this month that address how employment discrimination laws apply to employee benefits.

Please note that the most noteworthy recent development discussed below, the Ninth Circuit's October 4 opinion in Barnett v. US Air, Inc., will be a central focus of discussion at our Employment Law Seminar at the Portland Zoo Ballroom on Tuesday, October 24. If you are interested in attending and have not yet signed up, please do so now as we are expecting our largest turnout ever and are rapidly approaching full capacity. For more information, please send an e-mail to Kathy Barnett at kbarnett@stoel.com. We look forward to seeing many of you there.

New Rules Governing the Interactive Process. Last year, in a trilogy of cases, the U.S. Supreme Court established a framework of analysis for the Americans with Disability Act ("ADA") that makes it more difficult for an employee to show that he or she is disabled and subject to the protections of the ADA. This month, the Ninth Circuit Court of Appeals put the pressure back on employers within its jurisdiction (which includes most of the West) by placing a heavy burden on employers to take affirmative steps when dealing with a disabled employee who needs or requests an accommodation. In Barnett v. U.S. Air, Inc., No. 96-16669, 2000 WL 1468743 (9th Cir Oct. 4, 2000), the Ninth Circuit laid down the following important ground rules:

  1. If an employee or his or her representative requests an accommodation, or the employer recognizes the need for an accommodation, the employer must engage in what the courts call the "interactive process." The interactive process, which has been the subject of previous ADA decisions, is a mutual exchange of information between employee and employer in which the two parties have the shared goal of identifying an accommodation that allows the employee to perform the job effectively.

  2. If the employer does not participate in good faith in the interactive process when required to do so, then (assuming that the employee is truly disabled) the employer cannot later obtain dismissal on summary judgment of a lawsuit brought by the employee for failure to accommodate, even if engaging in the process would have been futile because there was no reasonable accommodation available.

  3. To trigger the interactive process, the employee need not use any magic language; all the employee needs to do is mention that he or she needs some help because of a medical condition. The employee does not need to mention being disabled or the ADA, or use the term accommodation.

  4. Technically, an employer is not required to engage in the interactive process with a non-disabled employee. In reality, however, an employer is unlikely to know whether an employee actually is disabled at the time the interactive process commences. Consequently, in most circumstances, it probably is not advisable to refuse to engage in the process. Moreover, the interactive process may itself provide an opportunity to determine whether the employee actually is disabled.

  5. To participate in good faith in the interactive process, both sides must communicate directly, without delay or obstruction, and exchange essential information. Typically, of course, the employer will have more information about the essential functions of the job and other relevant workplace information, whereas the employee will have more information about his or her medical condition and the limitations associated with that condition. At a minimum, an employer engaging in the interactive process generally should (1) identify the essential and non-essential functions of the job at issue; (2) ask the employee to provide information about the medical condition at issue and identify the limitations caused by that condition; (3) ask the employee what, if any, accommodations the employee desires; (4) identify other possible accommodations; (5) assess the effectiveness of each identified accommodation; (6) discuss alternatives when possible accommodations seem ineffective or too burdensome; and (7) when possible, implement one of the identified accommodations. When selecting a reasonable accommodation for implementation, the employee's expressed choice of accommodation should be given "primary consideration."

    To the extent possible, the employer should document conversations that occur as part of the interactive process and consider having the employee's supervisor participate in the discussions (both as a witness and because the supervisor may be able to contribute to the discussion of the demands of the job and potential accommodations). Any delay in the process caused by the employee also should be noted in writing. Just as the employer's delay or lack of participation can cause it to lose a subsequent ADA lawsuit, the employee's delay or lack of participation can cause him or her to lose a lawsuit as well.

  6. If an employee's disability prevents him or her from performing the essential functions of his or her job, but the employee is qualified to perform the duties of another available position, the employee is still a qualified employee with a disability who is subject to the protection of ADA. And, under Barnett, a transfer to the available position will be a reasonable accommodation even if another employee or applicant is more qualified. (Notably, the Seventh Circuit Court of Appeals - the Ninth Circuit's Midwest counterpart - reached the opposite conclusion in a decision published two weeks before the Barnett decision. See EEOC v. Humiston-Keeling, Inc., No. 99-3281, 2000 WL 1310519 (7th Cir Sept. 15, 2000). This means that it is likely that the Supreme Court will be asked to resolve this difference. Until that occurs, however, Barnett is the law for the western United States.) Transfer also is a reasonable accommodation, even if the transfer interferes with a bona fide seniority system (regardless of whether the seniority system is part of a collective bargaining system). The existence of a seniority system, however, may be used by the employer as a factor in demonstrating why the transfer creates an "undue burden" that would justify denying the transfer. Specifically, the Ninth Circuit held:

    "We hold that reassignment is a reasonable accommodation and that a seniority system is not a per se bar to reassignment. However, a seniority system is a factor in the undue hardship analysis. A case-by-case fact intensive analysis is required to determine whether any particular reassignment would constitute an undue hardship to the employer. If there is no undue hardship, a disabled employee who seeks reassignment as a reasonable accommodation, if otherwise qualified for a position, should receive the position rather than merely have an opportunity to complete with non-disabled employees." Barnett, 2000 WL 1468743 at *12.

What Does it All Mean? If you think an employee may need an accommodation, or if an employee has requested an accommodation, begin a dialogue - that is, actually talk with the employee - to determine (1) if the employee is disabled and (2) what, if anything, the company can do to assist the employee in performing his or her job despite the impairment (and this includes transferring the employee to another available position). Document your discussions and conclusions and act promptly.

A New Danger When Using Temporary Employees. Businesses that use temporary employees and have a union or are facing a union organizing campaign need to be aware that the NLRB has overturned two decisions, one 10 years and the other 27 years old, that may seriously affect the treatment of temporary employees. In a joint decision, M.B. Sturgis, Inc. and Jeffboat Div., 331 NLRB No. 173 (2000), the NLRB held that temporary employees may be included in a bargaining unit at the employer to whom they are leased. (Temporary employees have always been able to organize employees of their "primary employer," that is, the temporary or leasing agency). This decision applies to both the organization of new unions as well as already existing bargaining units.

As with other categories of employees, the determination of whether temporary employees will be included in a bargaining unit is based on an analysis of whether there is a "community of interest" among the employees. Temporary employees that are used sporadically or for specific narrow functions are unlikely to be found to share a community of interests with regular employees. But, if an employer uses large numbers of temporary employees and the temporary employees are commingled with the regular workforce, they are likely to be deemed to share a community of interests with regular employees and be included in a bargaining unit. In particular, if temporary employees are used as a way of screening future regular hires, they are likely to be included in a bargaining unit with regular employees.

Employers that have unions and also use temporary employees are the most likely to experience immediate difficulties with this change in the law. In instances where temporary employees successfully petition to be added to the bargaining unit, it may be unclear whether the temporary employees will be subject to the existing terms and conditions - that is, entitled to union wages and benefits from the leasing employer - or whether new terms directed specifically at temporary employees may be negotiated. Of course, newly organized bargaining units that include temporary employees will have the opportunity to bargain for separate terms and conditions for those employees, but practical problems remain. The NLRB has indicated that neither the leasing employer nor the temporary agency would be required to bargain over terms beyond its control. It remains unclear, however, how that will work. Indeed, in some circumstances it will be difficult to determine which party - the leasing employer or the temporary agency - will be negotiating with the union over essential terms, including even the applicable wage paid.

What Does it all Mean? If you use temporary workers, take a closer look at how you use them. The more you can distinguish between your regular employees and your temporary employees the better. It generally is advisable to make explicit in a written contract between the leasing employer with the temporary employment agency the allocation of employer responsibilities - especially the right of control, day-to-day supervision and the payment of wages and benefits. To the extent possible, these responsibilities should be allocated to the temporary agency. Also, consider limiting the length of time a temporary employee can be assigned to your workplace, you may want to use the length of your company's "probationary" or "introductory" period (typically 90 to 180 days). If you contract for such a limited period of service, be sure to include a period of disengagement during which the temporary employee cannot be assigned to your workforce, also typically 90 to 180 days.

New EEOC Compliance Manual. The EEOC has issued a new 70-plus page compliance manual that attempts to explain how employment discrimination laws apply to employee benefits including life and health insurance, long and short term disability benefits, severance benefits, and pension and other retirement benefits. Of note, the EEOC has backed off its widely rejected position that health insurance and disability benefits could not offer different coverage for mental and physical conditions. The EEOC, however, still takes some positions that have been rejected by several courts. Consequently, like all EEOC guidance, the compliance manual should be viewed as instructive, but not as a definitive statement of the law.

Copies of the manual can be obtained from the EEOC's website: www.eeoc.gov. For those with further interest, a task force made up of members of both the Stoel Rives Labor and Employment Group and Employee Benefits Group has been formed to respond to concerns regarding discrimination issues arising out of employee benefits. Feel free to contact either Ron Grossmann (rsgrossmann@stoel.com 503/294-9214) of our Employees Benefit Group or Andrew Altschul (amaltschul@stoel.com 503/294-9411) of our Labor and Employment Group directly with questions.

Confused? Have a Question? If you have questions about the confusing and confused laws governing leaves of absence, please feel free to call on any of our Labor & Employment attorneys. For a complete list, click on www.stoel.com.

This is a periodic publication of the Labor and Employment Law Department of Stoel Rives LLP for the benefit and information of its clients and friends. This Alert should not be construed as legal advice or a legal opinion on specific facts or circumstances. The contents are intended for general informational purposes only. You are urged to consult your own lawyer concerning your own circumstances and any specific legal questions you may have.


Copyright 2000, STOEL RIVES LLP

This material is provided as a service to selected clients and friends of STOEL RIVES LLP.


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