Creating More Red Tape to Employ Foreign Workers

On November 19, 2009, Senators Bernie Sanders (I-Vt.) and Charles Grassley (R-Ia.) introduced the Employ America Act (S. 2804).  The Act would require employers to certify they have not laid off, nor will lay off, a large number of employees before they are allowed to employ foreign workers in the United States. Under the Act, the Department of Homeland Security would be prohibited from approving any employment visa filed by an employer, unless the employer has provided written certification, under penalty of perjury, to the Secretary of Labor that it: (1) has not provided a notice of a mass layoff pursuant to the Worker Adjustment and Retraining Notification (WARN) Act during the 12-month period immediately preceding the date on which the alien is scheduled to be hired; and (2) does not intend to provide a notice of a mass layoff pursuant to the Act.

New Legislation Seeking the Reduction of Pleading Standards

 On November 19, 2009, legislation was introduced in the U.S. House of Representatives that seeks to reverse a recent U.S. Supreme Court case, Ashcroft v. Iqbal, 129 S.Ct. 1937.  The legislation (H.R. 4115) is entitled the Open Access to Courts Act of 2009, and it seeks to lower the standard of pleading articulated by the Supreme Court to for a plaintiff to state a legal claim. 

On July 22, 2009, Sen. Arlen Specter, D-Pa., similarly introduced the Notice Pleading Restoration Act (S. 1504), seeking to overturn the Iqbal decision.  Iqbal wasn’t an employment law decision.  Rather, the case involved the claim brought by a Pakistani Muslim detained after 9/11.  Iqbal sued then-Attorney General John Ashcroft and the F BI, alleging he was discriminated against unlawfully based upon his race, religion or national origin in contravention of the First and Fifth Amendments.  The Supreme Court’s ruling that Iqbal failed to plead sufficient facts to state a claim for purposeful and unlawful discrimination set out a higher pleading standard applicable to employment discrimination cases.

As a result, pleadings that state “mere inferences or conclusions” will no longer suffice under the Iqbal standard.  Both the Senate and House bills seek to return the pleading standards to the law under Conley v. Gibson, 355 U.S. 41 (1957), a prior Supreme Court decision that held that a case could proceed “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”  Prior to Iqbal, the Supreme Court articulated in Bell Atlantic Corp. v. Twombly, a more strict, “plausibility” standard, requiring in this case “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement.”

The legislation is yet another knee-jerk congressional reaction to a defense verdict by the Supreme Court.  If an uninformed person were to listen simply to the rhetoric, they might infer the Court was denying Mr. Iqbal his day in court.  That was not the case, the dismissal was without prejudice, which means Mr. Iqbal can return to court and replead his claim in the level of detail required by the court.  Usually, if the reason a case is dismissed is based upon a failure to properly plead, the plaintiff will be given an opportunity to bring the case again.  Most plaintiffs’ attorneys in employment cases meet the pleading standard articulated in Iqbal.   Furthermore, most state courts do not require notice pleading, and plaintiffs’ lawyers have to plead in more detail there anyway.   

Courts don’t want plaintiffs who just cite statutes in their pleadings; the allegations need to be somewhat more specific to survive the Iqbal pleading standards.  However, the trend recently is for Congress to introduce and pass legislation, such as the Lilly Ledbetter Fair Pay Act and the Americans with Disabilities Amendments Act, directed toward the nullification of Supreme Court decisions.  The Open Access to Courts Act and the Notice Pleading Restoration Act both clearly seek to contribute to this trend.

DOL offers Q&A on Workplace Pandemic Flu as it Relates to FLSA and FMLA

On November 6, 2009, the Department of Labor’s Wage and Hour Division published new guidance in the form of ”Question and Answer” documents for both the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA) relating to the Pandemic Flu. The documents provide information on common issues when employees get the flu and its affect on wages and hours worked and its affect on wages and hours and job-protected leave. 

The guidance document pertaining to the Pandemic Flu and the FLSA can be found here.  Within the guidance document, the DOL addresses common questions that arise concerning pay when an employee is required to or encourage to work from home.  

The guidance document pertaining to the Pandemic Flu and the FMLA can be found here.  Importantly, the guidance document states that since the FMLA provides for leave related to a serious health condition, “leave taken by an employee for the purpose of avoiding exposure to the flu would not be protected under the FMLA.”  Nevertheless, the DOL also states that the guidance is based on current law, and that it is reviewing whether to change regulations that may affect employers and employees “during the unique circumstance where the U.S. experiences a severe influenza pandemic.” 

As I described on November 12th, there is currently legislation seeking to mandate paid leave for employees out due to influenza.  I’ll keep you posted on further developments.   

 

Pick a Standard: How Will Employers Remove Cases to Federal Court?

On November 10, 2009, the United States Supreme Court heard oral arguments in Hertz Corp. v. Friend.  The case seeks to determine the appropriate standard for establishing a company’s place of business for purposes of federal diversity jurisdiction. For employers, this case establishes the parameters for removal of certain class-action lawsuits brought by employees in plaintiff-friendly state courts to federal court, a usually more preferable venue.

In this case the employer, a well known car rental company, is incorporated in Delaware with its corporate headquarters in based in New Jersey. California has the highest percentage of the company’s rental facilities, vehicle transactions, revenues generated and employees—significantly ahead of second-place Florida.  Hertz operates in forty-four (44) states.

Employees filed a class action in California state court against the company alleging that it had violated state wage and hour laws. The class was limited to employees in California.  Hertz then removed the action to federal district court pursuant to the Class Action Fairness Act (CAFA), which provides that class actions may be removed to federal court when there is “minimal diversity” and an amount in controversy over $5 million.

The plaintiffs sought to remand the case back to state court claiming that the company was a citizen of California and therefore not diverse from any plaintiff, as required for minimal diversity. The question then arose: where is Hertz’s principal place of business?

The district court applied the 9th U.S. Circuit Court of Appeals “place of operations” test, which considers a number of factors—such as “the location of employees, tangible property, production activities, sources of income, and where the sales take place”—to determine whether a corporation’s business in one state is “significantly larger than any other state in which the corporation conducts business.” The district court concluded that, using this test, California was Hertz’s principal place of business, and it sent the case back to state court. The 9th Circuit affirmed, and Hertz filed a petition for certiorari, which the Supreme Court granted on June 8, 2009.

In seeking high court review, Hertz noted that the federal circuit courts of appeal are currently using four different tests for determining a corporation’s principal place of business. 

• The 9th Circuit’s “place of operations” standard
• The 7th Circuit uses a “nerve center” test, which exclusively emphasizes the location of the “corporate brain”—ordinarily defined as the place “where the corporation has its headquarters.”
• The 3rd Circuit looks at the corporation’s center of activity, and
• Several Circuits analyze the totality of the corporation’s activities (the 5th, 6th, 8th, 10th, and 11th Circuits).

At oral arguments, Hertz argued for the “nerve center test” based on the location of a company’s headquarters, or “the site from which a corporation directs and controls all the company’s operations throughout all of its locations.” That is a “relatively straightforward” determination that the public can easily ascertain and it also preserves diversity jurisdiction in all but a company’s headquarters state.  Hertz’ attorney cited the example of Wal-Mart Stores Inc., which is “universally recognized to be an Arkansas corporation.” But under the 9th Circuit’s standard, it might be viewed as a Texas company, because it has more stores and employees there than any other state. 

In contrast, the employees defended the 9th Circuit test as a fairer assessment of where a company’s “people and property are.”  Counsel for the employees also argued that the 9th Circuit test generally focused on Congressional intent. The term “principal place of business” was plucked from the bankruptcy context, where most courts had employed a multifactor approach.

During the proceeding, Justice Ruth Bader Ginsburg stated that under the 9th Circuit test, “California is going to be the big winner in this. It’s going to be able to keep all those cases in its state court because so many multistate corporations, I would imagine, would come out, just the way Hertz does.”  Justice Scalia stressed that if Congress wanted a multifactor approach, “it would have said, the principal State in which business is done.”  Though most of the court appeared to accept some version of a headquarters standard, several justices appeared concerned about the possibility that it might result in abuse by corporations seeking to avoid state courts. Justice Sonia Sotomayor suggested that “there has to be something more to the test. . . .There has to be some form of activity in that place.” She suggested a compromise under which a company’s principal place of business would presumptively be its headquarters or “nerve center,” but the opposing party would be able to challenge that designation. “You can rebut it if it is a shell headquarters.”

This is an important case will have a major impact on where class-action litigation will occur in the future.  Florida leads the nation in wage and hour collective action litigation brought in Federal court.  Look for  an update on the decision after the Supreme Court decides the matter.

To Conquer the Flu and In Quest of Happy Families — Mandatory Paid Leave Coming!

There is a great deal of legislation addressing workplace concerns in Congress currently.  Two bills directly impacting the leave policies of employers are working their way through the legislative pipeline.  Both of the bills described below mandate paid leave for employees in certain situations and deserve monitoring and attention from employers.

Emergency Influenza Containment Act

On November 3, 2009, the Emergency Influenza Containment Act (“EICA”)(HR 3991), was introduced into the U.S. House of Representatives.  Should EICA become the law of the land, it would be effective no later than fifteen (15) days after the date of enactment and would expire after two years.  Moreover, the EICA specifically applies to “influenza-like-illnesses such as the novel H1N1 virus.”   

EICA seeks to provide an employee with up to five (5) days of paid sick leave per twelve (12) month period when the employer “directs an employee to leave work or not to come in to work because the employer believes the employee has symptoms of a contagious illness, or has been in close contact with an individual who has symptoms of a contagious illness . . . .”  Under EICA, a failure to provide the mandated paid sick leave is considered a violation of the Fair Labor Standards Act and the employer will be considered to have willfully failed to pay minimum wage to the affected employee.

Under the EICA, employers would be prohibited from firing, disciplining, or retaliating against workers who comply with the employer’s directive to stay home or not come to work.  However, the bill permits the employer to cut short an employee’s paid sick leave allotment by notifying the employee of its belief that he or she can return to work. 

The EICA would apply to businesses with fifteen (15) or more employees, and is available to both full- and part-time employees.  Covered employees would be entitled to an amount of paid sick leave calculated based on the employee’s regular rate of pay and scheduled hours of work.  Employers with less than fifteen (15) employees and companies that already provide five or more paid sick days per year would be exempt from the EICA.

Happy Families Act

In June of this year, I wrote a short piece on this legislation.  Rep. Rosa DeLauro (D-Conn.) and the late Senator Edward M. Kennedy introduced the Healthy Families Act (H.R. 2460/S. 1152).  This legislation would require employers with 15 or more employees to provide up to seven paid sick days each year.  In addition to time off for an employee’s own — or a family member’s — physical or mental illness, injury, medical condition, or preventive care, the Healthy Families Act also would provide paid sick time for absences related to domestic violence, sexual assault, or stalking.  Employees would be entitled to accrue one hour of paid sick time for every 30 hours worked, up to a total accrual of 56 hours — or seven days — of paid sick time.  Employees would begin accruing hours as soon as they start working for a covered employer and could begin using the accrued time 60 days from their first day of work.

While the Healthy Families Act has been stalled for the past few months, I anticipate that the EICA should move more quickly through the legislative process as a result of mounting concerns regarding influenza-related illnesses.  I will work hard to keep you informed on the status of these important intiatives.  Let me know if you have questions.

 

FMLA Expansion Comes to Fruition

As I predicted yesterday, President Obama signed into law the Fiscal Year 2010 National Defense Authorization Act (H.R. 2647).  The new law includes an expansion of the recently-enacted exigency and caregiver leave provisions for military families under the Family and Medical Leave Act of 1993 (FMLA).

 

 

More FMLA Amendments Imminent!

The Supporting Military Families Act of 2009 (SMFA), a part of the National Defense Authorization Act for Fiscal Year 2010 (HR 2647), will amend the Family and Medical Leave Act (FMLA) and mandate  exigency leave to all covered active duty members and expand the military caregiver provision to family members of certain former service members.

Rep. Lynn Woolsey (D-Ca.) and Sen. Chris Dodd (D-Cn) co-sponsored and introduced the SMFA on July 30, 2009. The bill then was tacked onto the U.S. Department of Defense authorization.  On October 22, 2009, the Senate agreed to a conference report on the National Defense Authorization Act for Fiscal Year 2010 that included the amendments to the FMLA.  President Obama is reportedly expected to sign the legislation into law.

Covered Active Duty

Under the new law, covered active duty under the FMLA would mean:

• In the case of a member of a regular component of the Armed Forces, duty during the deployment of the member with the Armed Forces to a foreign country; and
• In the case of a member of a reserve component of the Armed Forces, duty during the deployment of the member with the Armed Forces to a foreign country under a call or order to active duty under a provision of law referred to in Section 101(a)(13)B) of Title 10, United States Code.

References throughout the law to “active duty” would be changed to “covered active duty.” The bill would extend eligibility to those deployed to a foreign country, rather than limiting the availability of exigency leave to those deployed in support of a contingency operation.

One purpose of the SMFA is to correct DOL regulations concerning the FMLA which limited access to exigency leave to Reserve and National Guard members only.  The issue arose based upon the DOL interpretation of the National Defense Authorization Act for Fiscal Year 2008 (NDAA), which amended the FMLA on Jan. 28, 2008, to create an entitlement for up to 12 weeks of leave for the spouse, son, daughter or parent of a person on or about to be on active military duty for any “qualifying exigency.”

In the preface to the DOL regulations, it stated: “Had Congress intended qualifying exigency leave to extend to family members of those in the Regular Armed Forces, it would have provided a different statutory definition that referenced alternative provisions of Title 10 to define ‘active duty.’ . . . In comparison, the provisions of the NDAA allowing an eligible employee to take leave to care for a ‘covered service member’ (also referred to as ‘military caregiver leave’) do provide a broader definition of the military service covered by that entitlement.”

Military Caregiver Leave

As the DOL’s FMLA regulations noted, the NDAA also amended the FMLA to provide caregiver leave for wounded service members for an eligible employee who is the spouse, son, daughter, parent or next of kin of a covered service member in order to provide up to 26 workweeks of unpaid leave during one 12-month period to care for a wounded service member.

The new FMLA amendments extend the 26 weeks of leave to family members of veterans for up to five (5) years after a veteran leaves service if he or she develops a service-related injury or illness that was incurred or aggravated while on active duty.  In the press release about the Supporting Military Families Act, it was noted that “a number of service-related illnesses and injuries may not manifest themselves until after a service member has left the military.” These illnesses might, for example, include traumatic brain injury and post-traumatic stress disorder.

EEOC’s New Posting Requirment for ADA and GINA

The EEOC has issued a new poster, dated November 2009.  This new version reflects current federal employment discrimination law, including the Americans with Disabilities Act Amendments Act of 2008. The poster was revised to add information about the Genetic Information Nondiscrimination Act of 2008, which is effective November 21, 2009.  The revised poster also includes updates from the Department of Labor.  Here’s the poster and here’s the poster request form.

USSC to Determine if Ledbetter Applies Beyond Pay Discrimination

On September 30, 2009, the U.S. Supreme Court decided to hear Lewis v. City of Chicago (7th Cir. 2008), a case that possesses shades of both the recent Ledbetter v. Goodyear Tire & Rubber case and the Ricci v. DeStefano cases.  It is similar to Ledbetter primarily because the primary issue deals with the applicability of the statute of limitations in cases of discrimination.  The similarity with Ricci is more contextual in that the case involves firefighters seeking positions and unhappy with the selection process.

In Lewis, the Seventh Circuit held that a group of African American firefighter applicants could not proceed with their discrimination claims against the City of Chicago because the discrimination charge they filed with the Equal Employment Opportunity Commission (EEOC) within 300 days and was therefore untimely.

The Lewis case gives the Supreme Court an opportunity to answer two important questions about the Ledbetter Fair Pay Act of 2009 (“the Act”). First, whether the courts will extend coverage beyond cases of pay discrimination. And second, whether the Act applies to disparate impact cases (that is, cases involving claims that an employment practice or policy that appears neutral on its face actually affects a protected group more harshly than an unprotected group).

In Lewis, about 26,000 entry-level firefighters took a written aptitude test to determine their eligibility for employment with the City of Chicago Fire Department. The plaintiffs’ test scores placed them in the “qualified” category. However, only applicants whose test scores placed them in the “well qualified” category were given the jobs. The City began hiring applicants from the “well qualified” group several months after the test scores were disclosed to the applicants. The plaintiffs sued the City, claiming the aptitude test had an adverse impact on African American applicants. The plaintiffs claimed their charge was timely because it was filed within 300 days of the date the City hired the first applicant in the “well qualified” group.

Advancing a position similar to that of the plaintiff in Ledbetter, the plaintiffs in Lewis argued that the charge filing period began to run not when the test results were communicated but when the city began using the test results to hire applicants. The Seventh Circuit rejected this argument, holding that the discrimination was complete when the tests were scored and the discrimination was discovered when the applicants learned the test results. Instead, the Seventh Circuit held that the plaintiffs’ lawsuit was untimely because they filed their EEOC charge more than 300 days after they learned of their test results.

The Seventh Circuit’s opinion follows very closely the Ledbetter analysis, which was subsequently reversed through the passage of the Act. Now that the Act has overruled Ledbetter, it is not clear how the Supreme Court will evaluate the Seventh Circuit’s decision in Lewis. Under the Act, at least for purposes of discrimination in compensation based on a theory of disparate treatment (that is, intentional discrimination), discrimination occurs (1) when the discriminatory practice is adopted, (2) when an employee becomes subject to the discriminatory practice, or (3) when the discriminatory practice affects the employee. Given the expansive language and intent of the Act, the Court may find that it applies to the plaintiffs’ claims in Lewis.

Undoubtedly, the impending Lewis decision will have a significant effect on employers and be another major decision looming on the horizon.  The Seventh Circuit is not the first to address whether the Act expands beyond the scope of pay discrimination. I’ll keep you updated!

Briscoe v. New Haven: Providing For The Return of Ricci

Discrimination seems intuitively  simple, yet it is truly complicated.  One reason for discrimination’s complexity is that the law has developed in such a way that acknowledges certain theories of discrimination — and sometimes these theories conflict.  Earlier this year, the U.S. Supreme Court decided Ricci v. DeStefano, a case that addressed the standard under to which to analyze the conflict between disparate treatment and disparate impact.  The case is facinating not only in its holding, but in the analysis contained within the concurring and dissenting opinions.

In April, June and July, I wrote several posts about the Ricci case.  To summarize, the white firefighters of New Haven, Connecticut filed a Title VII disparate treatment claim when the fire department refused to certify the results of a promotion test.  The City’s basis for disrecarding the promotion test was its fear of a disparate impact claim because the results were statistically skewed against the black firefighters that took the test.

 The Supreme Court found that skewed statistics were no reason to ignore the results of the announced process for promotion.  Instead, in order to disregard the promotion test, the City had to possess a “strong basis in evidence to believe it will be subject to disparate-impact liability.”  The “strong basis in evidence” test is different than the test used by many Federal Circuit Courts. 

In Ricci, the Supreme Court found that the City could not demonstrate that a “strong basis in evidence existed” and granted summary judgment for the white firefighters.  Not only is the Ricci case interesting from an analytical perspective, it certainly garnered a substantial amount of press due to the political climate at the time.  When Ricci was decided, Justice Sotomayor (who was part of the Second Circuit panel that held in favor of the City) was undergoing Congressional scrutiny as a candidate for the Supreme Court.

Now, the City’s fear of a disparate impact claim by a black firefighter has come to pass.  Michael Briscoe, a black, ten-year veteran of the fire department, filed a complaint in the U.S. District Court alleging that the test ”was unfair because it undervalued the oral portion of the test, on which he did better.”  The promotion test was 60% written and 40% oral. There is little doubt the Briscoe case will garner substantial attention given the attention given the Ricci case.  I’ll keep you posted on further developments.