Employment & Labor Seminar Presentation 2014 - Kansas City

© 2014 Armstrong Teasdale LLP

© 2014 Armstrong Teasdale LLP © 2014 Armstrong Teasdale LLP

Dan O’Toole and Larry Tucker Presented by

Employment & Labor Law Update


State ex rel. Sir v. Gateway Taxi Management Co. 400 S.W.3d 478 (Mo.App.2013) Plaintiff sued cab company for refusing to hire him as a taxi cab

driver because Plaintiff had suffered a stroke. Missouri Commission on Human Rights found in favor of Plaintiff and awarded him damages.

Cab company challenged Commission’s findings that: 1. Taxi cab drivers are “employees” and not independent

contractors; and

2. Plaintiff was “disabled.” Drivers leased cabs from cab company but company paid insurance

and maintenance. Drivers kept all fares and tips and paid for gas and cleaning cab.


Sir (cont.)

The Missouri Human Rights Act does not define “employee.” Cab company urged use of the 20 factor IRS test. Court applied dictionary definitions including “employ: to

provide with a job that pays wages or a salary or with a means to earn a living.” Independent contractors typically are hired to perform a

“specific task, using their own tools, for a fixed sum and without control except as to the result.” The MCHR’s conclusion that cab drivers are employees is

supported by competent and substantial evidence.


Sir (cont.)

Court found that competent and substantial evidence supported conclusion that Plaintiff is substantially limited in major life activity of ambulation.

• Plaintiff was not required to show he was unable to perform a broad range or class of jobs.

The MHRA does not permit punitive damages in proceeding before the MCHR. The MHRA permits “court” to award punitive damages in a “civil action.”


State ex rel. Hollins v. Pritchett 395 S.W.3d 600 (Mo. App. 2013) Suit alleged that Beer, a Con-way Trucking manager whose

office was located in the City of St. Louis, persuaded a manager in Poplar Bluff not to hire Plaintiff for a job in Poplar Bluff because Plaintiff is a black female. Beer managed twelve (12) terminals in five states and was

out of the office about 75% of the time. Plaintiff alleged “upon information and belief” that Beer was

in his St. Louis office on at least one occasion when he discouraged Plaintiff’s hiring.


Hollins (cont.)

Plaintiff sued in the City of St. Louis but case was transferred to Butler County at Defendant’s request based on improper venue. Court of Appeals issues a writ of mandamus ordering the case

transferred back to the City of St. Louis. The record showed that Plaintiff had an honest and

objectively reasonable basis to believe that venue was appropriate in the City of St. Louis.


Plengemeier v. Thermadyne Industries, Inc. 409 S.W.3d 395(Mo.App. 2013)

Plengemeier resigned her employment on January 13, 2010 and on January 10, 2012 filed suit under the MHRA claiming discriminatory pay, denial of promotion and failure to provide a company car. The MHRA requires suit to be filed no later than two years

after the last discriminatory act. Trial court dismissed suit as untimely. Court of Appeals reversed. Plengemeier’s suit was timely

under the continuing violation theory since the last act of discrimination occurred within two years of the filing of suit. Plengemeier’s last paycheck was dated January 22, 2010.


Farrow v. Saint Francis Medical Center 407 S.W.3d 579(Mo.banc 2013)

Farrow given notice of discharge on December 10, 2008. Farrow filed a charge of sexual harassment and retaliation

with the MCHR on July 27, 2009 and thereafter files a lawsuit. MHRA requires charge of discrimination to be filed within 180

days of alleged discriminatory act.


Farrow (cont.)

Circuit Court grants summary judgment against Farrow because her claims are time-barred. Court of Appeals affirms. MCHR’s issuance of a notice of right to sue means that MCHR

found charge to be timely filed. Employer must challenge MCHR’s action in petition for

administrative review. Employer’s failure to file petition for administrative review

bars challenge to timeliness in action filed by employee.


Farrow (cont.)

St. Francis claimed it was not an “employer” under the MHRA and submitted letters from the MCHR in five prior charges supporting this assertion. The MHRA defines “employer” to exclude “corporations and

associations owned and operated by religious or sectarian groups.” Supreme Court finds that St. Francis does not satisfy the

exemption. St. Francis is a not-for-profit corporation and a not-for-profit does not have any “owners.”


Farrow (cont.)

Supreme Court dismisses public policy wrongful discharge claim against doctor because he is not an employer.

Supreme Court dismisses tortious interference claim against

doctor because doctor was Farrow’s supervisor acting on behalf of the hospital. Tortious interference claim requires third party.



Coyle v. City of St. Louis 408 S.W. 3d 281 (Mo.App. 2013)

Coyle filed a denial of promotion claim under the MHRA after he did not receive a promotion to Fire Chief. Coyle prevailed at trial but the Court denied (by failing to rule

on)Coyle’s motion to amend judgment to instate him as Fire Chief or award him front pay. City did not dispute Coyle’s contention that the jury’s verdict

did not make him whole and conceded that limited front pay should be awarded.


Coyle (cont.)

Court of Appeals remands case so trial court can calculate front pay and consider other equitable relief. Was it appropriate to concede that the judgment did not

make Coyle whole since it did not include a promotion or front pay?

• Coyle only had to prove that race contributed to the denial of promotion to prevail.

• A verdict in Coyle’s favor does not necessarily mean that he would have been promoted.


State ex rel. Washington University v. Richardson 396 S.W.3d 387(Mo. App. 2013)

Student sued University under the “public accommodation” provisions of the MHRA alleging that she was sexually harassed by her academic advisor and subjected to retaliation after she complained. Circuit Court prohibited the MCHR from acting on student’s

complaint finding that the Master of Fine Arts program at University was not a place of public accommodation. University was “open to the public” because term includes a

“subset of the public.” Doe v. Kansas City, Missouri School District, 372 S.W.3d 43

(Mo. App. 2012)


Hedrick v. Jay Wolfe Imports 404 S.W.3d 454 (Mo.App. 2013) Car dealership had policy requiring household members of

employees to either buy Honda from Wolfe or give Wolfe chance to meet competitor’s price. Hedrick was discharged after his girlfriend bought a Honda

from a competitor. Hedrick then filed a wrongful discharge lawsuit. Public policy must be expressed by constitutional provision,

statute or regulation. Court of Appeals affirms dismissal because Hedrick’s

discharge did not violate a clear mandate of public policy.


Clemmons v. Kansas City Chiefs Football Club, Inc. 397 S.W.3d 503 (Mo. App. 2013)

Clemmons was fired after 38 years of employment and then sued for age discrimination. Chiefs moved to compel arbitration based on agreement Clemmons signed two years after he started working.

Court must determine: • Whether an arbitration contract exists;

• Whether the dispute is covered by the contract; and

• Whether the contract is subject to revocation under contract principles. Court of Appeals found the arbitration agreement invalid because there

was no consideration: • No mutual promise to arbitrate;

• Continued at-will employment is not sufficient consideration.


Sniezek v. Kansas City Chiefs Football Club, Inc. 402 S.W.3d 580 (Mo. App. 2013)

Sniezek was fired after 28 years of employment and then sued for age discrimination. Chiefs moved to compel arbitration based on an arbitration agreement Sniezek signed on her first day of work. Court of Appeals found the arbitration agreement invalid

because there was no consideration. Employment-at-will relationship already existed at time

Sniezek signed arbitration agreement.


Johnson v. Vatterott Educational Centers, Inc. 410 S.W.3d 735(Mo.App. 2013)

Plaintiff hired as Director of Admissions in June 2009. On March 15, 2010, Defendant gave Plaintiff an Employee

Handbook that contained a section titled “At Will Employment and Binding Arbitration Agreement,” which was signed by Plaintiff and Defendant’s HR director. Plaintiff was discharged and filed suit alleging racial

discrimination, harassment, and retaliation in violation of the MHRA. The Circuit Court denied the motion to compel arbitration,

finding that the arbitration agreement was not enforceable.


Johnson (cont.)

On appeal, the Missouri Court of Appeals affirmed. Although the arbitration agreement contained provisions stating that it

was a binding and enforceable contract, other provisions of the handbook made it clear that nothing in the handbook was contractual and that the handbook could be changed at employer’s discretion.

Additionally, the arbitration agreement was not executed by a representative with authority to bind Defendant.

• The handbook explicitly stated that only Defendant’s President could execute any “agreement . . . for employment other than at-will.”

• Other provisions indicated that “[n]o statement or promise by a supervisor, manager, or department head . . . will constitute an agreement with an employee.”


State ex rel. Hewitt v. Kerr ____ S.W.3d ____, 2013 WL 5725992 (Mo.App., Oct. 22, 2013)

Arbitration agreement required disputes to be submitted to the NFL Commissioner, who is elected by the NFL teams. Court finds the provision requiring disputes to be submitted

to Commissioner to be unconscionable. The Court strikes the provision from the contract and enforces

the remaining provisions of the arbitration agreement.


Central Trust and Investment Co. v. Kennedy __ S.W.3d __, 2013 WL 268687 (Mo.App. 2013)

Customer contact information is not a “trade secret” under the Missouri Uniform Trade Secrets Act. The proper means of protecting customer contacts is a

noncompetition agreement.


JumboSack Corp. v. Buyck 407 S.W.3d 51(Mo.App. 2013)

Buyck was a salesperson in 2003 at $70,000 plus a car allowance and expenses. Six months later, Buyck signed a non-compete agreement under threat of discharge. Non-compete said “Any changes in Employee’s compensation,

position or job…shall in no way void or otherwise affect the remaining provisions of this Agreement.”


JumboSack (cont.)

In 2005, Buyck’s salary changed to $57,000 plus 1.5% commission. Later reduced to 1.25%. Buyck resigned when he learned of impending reduction to

$50,000 and a new policy requiring salespersons to repay one-third of any unpaid invoice. Buyck joined competitor and was promptly sued for breach of

the non-compete agreement. Trial court granted summary judgment for Buyck because of prior breach by employer and lack of consideration.


JumboSack (cont.)

Continued at-will employment, which provides continued access to protectable assets and relationships, is sufficient consideration to support non-compete agreement. Court recognizes prior breach doctrine as a defense but finds

that fact issues relating to the effect of compensation changes precluded summary judgment.


Vance v. Ball State University 133 S.Ct. 2434 (2013)

Catering assistant sued for racial harassment under Title VII. Under Faragher/Ellerth decisions, strict liability if supervisor

harassment results in tangible employment action. Narrowed definition of “supervisor” for Title VII harassment

claims. Coworker who controls employee’s daily activities but lacks

authority to make tangible employment decisions (e.g., hire, terminate, demote, promote, transfer, discipline) is not a “supervisor.”

If coworker harassment, employer only liable if knew or should have known of harassment and failed to take prompt remedial action.


University of Texas Southwestern Medical Center v. Nassar - 133 S.Ct. 2517 (2013) Increased burden of proof for retaliation claims under Title VII and

similar statutes. Applied “but for” causation standard rather than less demanding

“motivating factor.” Doctor of Middle Eastern descent complained about religious and

ethnic discrimination by his supervisor at the University. Chair of Internal Medicine convinced hospital not to hire Dr. Nassar

based on prior agreement with University regarding faculty and to punish him for discrimination complaint about supervisor.

Must show adverse action occurred because of protected conduct and no other reason.


U.S. v. Windsor 133 S.Ct. 2675 (2013) Surviving spouse of same sex couple was denied spousal tax

deduction due to definitions of “spouse” and “marriage” in the Defense of Marriage Act (DOMA). Definition of “marriage” as between one man and one woman

violates Equal Protection Clause of U.S. Constitution. Potential impact on application of FMLA which provides leave

for serious health condition of “spouse.” Consequences for other leave/benefit laws and plans.


Bennett v. Riceland Foods, Inc. 721 F.3d 546 (8th Cir. 2013)

Two Caucasian maintenance workers complained to employer about supervisor making racist comments about African-American workers.

After minimal investigation, employer concluded complaints lacked merit.

Supervisor was angry about complaints. As part of cost cutting measure, supervisor proposed eliminating

complainants’ jobs. Two Caucasian employees sued claiming retaliation under Title VII and

Section 1981. Company liable under “cat’s paw” theory because although supervisor

was not the ultimate decisionmaker, he influenced the decision.


Lucas v. Jerusalem Cafe, LLC 721 F.3d 927 (8th Cir. 2013)

For three years six unauthorized aliens worked in a KC cafe. Some of the workers were paid less than minimum wage and

none received overtime pay. Workers sued the Cafe, its owner and manager for violating

the FLSA. FLSA applies to employers who illegally hire unauthorized

aliens and workers could recover lost wages, liquidated damages and attorneys’ fees.


Wright v. St. Vincent Health System 730 F.3d 732 (8th Cir. 2013)

Surgery tech received write ups for poor performance. Supervisor spoke with Human Resources about terminating

employee. Next day employee complained about race discrimination and

harassment. Hospital terminated employee 48 minutes after complaint. Tech sued hospital under Title VII alleging race discrimination and

retaliation. Although timing raised inference of retaliation, employer showed

that it had decided to discharge tech due to performance and insubordination before protected activity.


Dollar v. Smithway Motor Xpress, Inc. 710 F.3d 798 (8th Cir. 2013)

Dollar worked for employer as a driver manager. Employer threatened to reassign Dollar to a different position (driver recruiter)because of attendance issues. Dollar was absent because of psychiatric issues but never

requested or was provided with FMLA leave. Employer discharged Dollar before FMLA leave would have expired. Dollar admits she could not perform essential functions of

the “driver manager” job when FMLA would have expired but claims she could have worked as a driver recruiter.


Dollar (cont.)

Following FMLA verdict for Dollar, Employer claims that Dollar’s admission she could not perform “driver manager job” should have been dispositive. Employer notes that FMLA does not impose a reasonable accommodation requirement. “While not a duty to provide reasonable accommodation, the

FMLA duty of restoration clearly and expressly broadens the employer’s obligation beyond a narrow focus solely on the actual position held by the employee before the onset of the serious health condition and extends to equivalent positions.” Verdict for Dollar affirmed but front pay award is reversed.


Owen v. Bristol Care, Inc. 702 F.3d 1050 (8th Cir. 2013) Nursing home administrator signed employment agreement

when hired that contained mandatory arbitration provision. Arbitration provision prohibited parties from arbitrating

class claims. Owen filed collective action on behalf of herself and other

administrators claiming they were improperly classified as exempt under FLSA and denied overtime pay. Contrary to NLRB’s position, class action waivers are valid in

mandatory arbitration provision.


Knutson v. Schwan’s Home Service, Inc. 711 F.3d 911 (8th Cir. 2013)

Location General Manager for frozen food delivery service suffered eye injury. No longer DOT certified to drive delivery trucks. After termination, sued for violation of ADA. Driving delivery truck was an essential function of manager

job even though rarely performed. Relied on employer’s job description and offer letter which

required DOT certification to drive trucks.


Olsen v. Capital Region Medical Center 713 F.3d 1149 (8th Cir. 2013) Mammography technician with epilepsy sued for failure to

accommodate under the ADA and MHRA. Employee had fourteen seizures at work some of which occurred

while attending to patients. Hospital made numerous efforts to provide accommodation

including redirecting some patients, removing mold, reducing brightness and glare of lights and eliminating scrolling from computers, and providing three leaves of absence.

Tech claimed needed intermittent leave to recover from seizures as accommodation.

Employee not qualified individual with a disability because could not safely operate sophisticated medical equipment and interact with patients.


The court affirmed a grant of summary judgment in UPS’ favor

by Judge Julie Robinson in the District of Kansas. Judge Robinson had found that plaintiff could not prove a prima facie case of retaliation, and even if he could, that he could not prove that his termination was in retaliation for his filing a workers’ compensations claim. Employee was terminated for dishonesty by UPS in November

of 2009.

Macon v UPS, Decided February 19, 2014, 10th Circuit Court of Appeals


Macon (cont.)

He filed a grievance and pursued it to a hearing before a two-state panel made up of representatives of management and the Teamsters’ union. The two-state panel unanimously agreed the termination was

appropriate. Macon sued claiming he had been terminated because he had

filed a workers’ compensation claim.


Macon (cont.)

The workers’ compensation claim was filed fifteen months

before Macon was terminated. The court focused on whether Macon could prove that the non-

retaliatory reason for his termination was merely a pretext. Macon said the expressed reason for his termination was a

mere pretext because: (A) UPS had engaged in a pattern of retaliatory conduct; (B) he was not, in fact, dishonest; and (C) other similarly situated employees were not terminated for the same offense.


Macon (cont.)

The court disagreed with Macon’s first argument because he disregarded the findings of the two-state panel. The fact that the CBA in place put the ultimate decision about whether the termination was appropriate in the hands of that panel was found to be very significant in undercutting Macon’s claims that his supervisors had singled him out for discipline after he had filed his workers’ compensation claim. The court disagreed with Macon’ claims of personal honesty,

again measuring his claims against the work done by the two-state panel. It concluded that the panel reasonably could have concluded that he was dishonest and not as he argued, just improperly trained.


Macon (cont.)

Macon’s argument about how other employees were treated was rejected as well by the court. Once again, the court gave heavy weight to the existence and performance of what it called an “independent grievance panel”. The court pointed to other instances of discipline where the two-state panel had not upheld UPS’ discipline against Macon as evidence that the process was fair and not retaliatory. The court ignored the lack of temporal proximity between the

filing of the workers’ compensation claim and the alleged retaliation.


Lykins v Certainteed Corporation, Decided February 12, 2014, 10th Circuit Court of Appeals (unpublished opinion)

Plaintiff appealed the district court’s grant of summary

judgment on his claim of being discharged in retaliation for reporting wrongdoing as a “whistleblower”. Mr. Lykins had reported to various supervisors at the plant

where he worked his concerns that he thought other employees were handling and disposing of toxic waste materials improperly.


Lykins (cont.)

The employee said his bosses were not receptive to his complaints. He never reported the alleged environmental law violations to any governmental agency before he was terminated. Lykins had been given an employee handbook with

information on how to make reports of known or suspected company violations. He made no investigation into whether the company was handling the waste products in accord with the wastewater discharge permit it held.


Lykins (cont.)

When Mr. Lykins got a poor work performance letter, he refused to accept it or sign that he had received it. He told plant management that he thought he was being retaliated against with the letter and the threat that if he did not sign the letter he would be terminated. After telling his story, he was terminated. Mr. Lykins sued for retaliatory discharge. The employer and

an individual defendant moved for summary judgment and the court granted the motions.


Lykins (cont.)

In reviewing the trial court decision , the Court of Appeals found that Kansas law requires a whistleblower to seek to stop unlawful activity through intervention of a higher authority which can be either inside or outside the place of employment. Reporting the conduct to the alleged wrongdoer alone was not sufficient to meet that requirement. The court held that a person seeking the protection of a

whistleblower must report alleged unlawful conduct either to someone above the alleged wrongdoer or to an outside authority. Mr. Lykins conceded he had not done either.


Lykins (cont.)

Also supporting the court’s decision was the fact that Mr. Lykins had been educated about the means by which he could make reports of actual or suspected company misconduct by being provided an employee handbook with this information in it. Included in that handbook was a discussion of the avenues an employee had for lodging a complaint including the use of a “hot line” which would be accessed anonymously. The court held that Mr. Lykins was not entitled to the status

of a “whistleblower” and affirmed the trial court’s grant of summary judgment.


Deboard v. Mercy Health System of Kansas, Inc., Decided November 26, 2013, 10th Circuit Court of Appeals The employee lost her suit against her former employer for

sexual harassment and retaliation in violation of Title VII. The Court of Appeals affirmed the grant of summary judgment in favor of her former employer. Ms. Deboard claimed that the employer knew or should have

known that her supervisor had created a hostile workplace through unwanted touching and sexual remarks. She also claimed that her employer did not do enough to prevent sexual harassment in the workplace and that when she reported the harassment, she claimed, she was fired in retaliation.


Deboard (cont.)

The conduct about which Ms. Deboard complained had started some five years before her termination. She admitted that she had never reported that conduct to her employer. Yet, she said the employer knew or should have known it was going on because other employees had experienced the same conduct. The conduct to which Ms. Deboard pointed had occurred eight

years before the employer received actual notice of her own complaints. That earlier incident was not shown to be either substantially similar or repeated in the intervening years.


Deboard (cont.)

The first time the employer received notice that Ms. Deboard was making a complaint is when it saw a Facebook posting by Ms. Deboard which made indirect references to her supervisor touching her improperly. When confronted by her employer about the postings, she denied having authored them. Later she admitted that she had written them. The employer demonstrated that once it had notice of Ms.

Deboard’s complaints it conducted a thorough and fair investigation. During that investigation, Ms. Deboard said she did not want to file a formal complaint against her supervisor.


Deboard (cont.)

Later, the employer determined that another complaint made by Ms. Deboard that she had been overpaid in the past was false. HR determined that Ms.Deboard was sending messages to other employees accusing the employer of misconduct in the investigation. It was determined that he messages had disrupted the workday at the hospital. As a result, Ms. Deboard was terminated.


Deboard (cont.)

The court made a detailed analysis of whether the employer had actual or constructive notice of the alleged sexual harassment by Ms. Deboard’s supervisor. It determined that Ms.Deboard had failed to meet her burden of showing that notice. The court found that the employer had sound policies in place seeking to prevent harassment and that Ms. Deboard was well informed of them. The court also focused on the prompt and effective response made by the employer when it saw the Facebook posting.


Deboard (cont.)

The court addressed the claim that Ms. Deboard had been retaliated against by focusing on whether she was able to show that the reason for her termination was a pretext. Ms. Deboard did not dispute the grounds for her termination. She conceded she had posted inflammatory messages on the internet and had sent provocative messages to co-workers. The court concluded that she failed to show the existence of a pretext.


Deboard (cont.)

One odd feature of the case is that the HR director’s determination that Ms. Deboard had never been overpaid as she had alleged, was determined after her termination to be inaccurate. A more detailed search of pay records found there had been at least one incident of overpayment. However, the court determined that the HR director reasonably believed that Ms. Deboard had lied about this issue when she was terminated.


Deboard (cont.)

Ms. Deboard attempted to argue that using Facebook to report sexual harassment was a valid way to do that and that as a result of the Kasten v Saint-Gobain Performance Plastics Corp. case decided by the U. S. Supreme Court she could not be fired for using that means of reporting. That case which dealt with the anti-retaliation provision of the Fair Labor Standards Act said that the provision extended to oral as well as written reports of alleged misconduct. The 10th Circuit distinguished that case because the employer for Mr. Deboard had methods for making reports about which she knew, but did not use.


Dickens v Creative Business Solutions, LLC, (D. Kan 2013)

Be careful what you say when you are asked to comment on an

applicant for a job.


Dickens (cont.)

Ms. Dickens said she was not hired by the United Way because an outside HR contractor, CBS, told United Way that it knew Ms. Dickens and that there were “red flags” concerning her and that she would not be a “good fit” for United Way. CBS was sued by Ms. Dickens claiming a violation of 42 USC

§1981 and tortious interference with her business expectancy.


Dickens (cont.)

CBS moved to dismiss the case and the District Court denied that motion. Based on the face of the pleadings, the court found that Ms.

Dickens had stated a valid claim. The president of CBS which provided HR services to United

Way and also had provided it to a former employer of Ms. Dickens, is alleged to have called United Way after it had decided to hire Ms. Dickens. The offer to hire her was withdrawn.


Dickens (cont.)

CBS knew that Ms. Dickens had worked for Florence Crittenton Services in Topeka. She knew that Ms. Dickens had omitted that employment from the resume she provided United Way. She also knew that Ms. Dickens had filed an administrative charge against Crittenton and then sued for race and disability discrimination. Ms. Dickens alleged that CBS had used this information to cause United Way to reverse its decision to hire her. The court found that Ms. Dickens had made the necessary

allegations to keep her case alive.


Dickens (cont.)

The lesson: If asked for information about a former employee, the better practice is to follow the advice of providing only limited information such as; Dates of employment; pay range; job description and duties and wage history. Under Kansas statutory law, if a written request for information is provided, additional information can be provided under some limited circumstances. See, KSA 44-119A, “Employer immunity from liability and suit for disclosure of employment administration.” The best practice is to provide only very limited, truthful

information.


Contact

Dan O’Toole [email protected]

314.621.5070 Larry Tucker [email protected]

816.221.3420

mailto:[email protected]



Employee Benefits Update

Jonathan W. Igoe Presented by


Affordable Care Act

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2010-2012 Key Provisions

These changes apply whether or not a plan is grandfathered. Dependent coverage up to age 26 No pre-existing condition exclusion for those under age 19 Limitation on Flexible Spending Account (FSA) coverage for

over-the-counter medications Removal of lifetime and phase out of annual dollar limits for

essential health benefits Summary of Benefits and Coverage (SBC)

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2013

FSA deferral limit capped at $2,500 annually Exchange notice issued to employees Medicare payroll tax increased from 1.45% to 2.35% on

employee’s earned income above $250,000 (employee only tax) New Medicare 3.8% tax on net investment income for

taxpayers with income above $250,000

65


Effective in 2014

Waiting period in excess of 90 days once employee is eligible to enroll is prohibited No pre-existing condition exclusion regardless of age Prohibition on annual limits on dollar value of coverage for

essential health benefits Automatic enrollment required for employers with more than

200 full-time employees (DELAYED)

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Pay or Play Rules/Shared Responsibility

Originally to be effective in 2014 but delayed one year to 2015 Additional delays and transition rules announced earlier this

month

Individual Mandate Individual must have minimum essential coverage or pay shared

responsibility penalty • Penalty in 2015: greater of 2% of income over filing threshold or

$325 per adult ($975 maximum for family) No penalty if individual covered by employer-sponsored group

health plan No penalty if individual covered by individual health insurance

policy through Exchange 67


Employer Mandate Applies on calendar-year basis Applies only to employers which employ on average 50 full-time

(“FT”) employees on business days during prior calendar year. • Regulations provide formula for converting part-time and

seasonal employees to FT equivalents for determining whether employer has 50 FT employees

Employer avoids penalty by offering to • At least 95% of FT employees and dependents (not spouse) ( but

see transition rules) • Minimum essential coverage which has • Minimum value and is • Affordable for employee

− Employee’s share of cost of self-only coverage no greater than 9.5% of employee’s household income

68


Action Items for Employer Shared Responsibility Analysis Determining FT status

• 130 hours per month treated as 30 hours per week

• Actual hours worked vs. equivalency method

• Final regulations provide some additional clarity as to who is FT Determine measurement period for calculating FT status for ongoing

employees • 3 to 12 months (note transition rules)

Initial measurement period for calculating FT status for new employees • Applies to new employees and variable hour and seasonal employees not

reasonably expected to work 30 hours per week

• Seasonal employees now defined to mean individuals who do not work more than six months. (This definition is different than the one used for determining if an employer has at least 50 FTs.) 69


Pay or Play Excise Tax for Employers

No Coverage Penalty • Imposed if employer does not offer minimum essential

coverage to 95% of FT employees and one such employee is enrolled in an Exchange and entitled to a premium tax credit

• Penalty is $2,000 times number of FT employees excluding first 30 employees

• Penalty indexed for inflation

• See transition rules

70


Insufficient Plan Penalty • Imposed if employer does offer minimum essential coverage

to FT employees, but such coverage lacks minimum value or is not “affordable” or

• Imposed if employer offers minimum essential coverage to at least 95% of FT employees, but one of excluded FT employees obtains coverage through Exchange

• Penalty is $3,000 per FT employee who is covered by Exchange and entitled to a premium tax credit

• Penalty is indexed for inflation • See transition rules

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Pay or Play/Shared Responsibility Planning

Evaluate whether medical plan coverage will be offered or employer will pay $2,000 penalty

If medical plan coverage offered • Confirm medical plan satisfies Minimum Essential Coverage

• Confirm medical plan is affordable and document employee contribution does not exceed 9.5% of wages

• Document that 95% of FT employees and dependents offered coverage with annual elections (see transition rules)

• Review employee census to determine who qualifies as FT employee (30 hours per week/130 hours per month)

• Keep plan documents updated to reflect pay or play provisions

• Implement tracking programs to monitor information for part-time/seasonal employees

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Transition Rules for 2015 Potential penalties for employers which have at least 50 FT or FT

equivalent employees but fewer than 100 FT or FT equivalent employees have been delayed for one year.

To take advantage of the delay, employers have to provide a certification that certain conditions have been met.

Employer may use a six consecutive month period in 2014 to determine if it has at least 50 or at least 100 FT or FT equivalent employees for 2015.

For larger employers, plan only has to be offered to 70% (instead of 95%) of FT employees for purposes of the no coverage ($2,000) penalty and the number of employees excluded for purposes of calculating the penalty is raised from 30 to 80.

73


Transition Rules for 2015 (cont’d.)

No delay or transition rules for insufficient plan ($3,000) penalty for larger employers.

If a plan does not offer coverage to dependents as required in order to avoid penalties, it can still avoid those penalties in 2015 if it takes steps this year to offer dependent coverage for 2015.

Certain non-calendar year plans can wait to comply until the start of their plan years in 2016

Plan may use a six month measurement period, for determining FT status, starting no later than July 1, 2014 and ending no earlier than 90 days before the first day of the 2015 plan year and still use a longer stability period in 2015 (such as 12 months).

74


Other Recently Announced Rules

Rules spelled out for monthly measurement periods as an alternative to look-back periods.

No liability for assessable payments in first year an employer is subject to the shared responsibility payment, if coverage is offered by April 1 of that year so long as coverage has minimum value

A former employee is treated as a new hire if not employed for at least 13 instead of 26 weeks (except for educational institutions)

Certain employees may be excluded from being counted as FT employees (e.g., volunteers, students on work-study programs)

Rules address possible calculation of hours for certain types of employees (e.g., airline employees and adjunct college professors) but still not yet for others (commissioned sales people)

75


Employer Reporting

If employer has more than 250 employees, employee’s 2013 Form W-2 must include cost of employer provided health care coverage

If grandfathered plan, must include statement on all benefits communication

Update COBRA forms to reflect existence of Exchanges Significant reporting for pay or play rules, voluntary for 2014,

mandatory for 2015 Issue SBCs Expect final rules for reporting shortly

76


Same-Sex Marriage

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Windsor Supreme Court decision

Struck down portion of Defense of Marriage Act (DOMA) which prohibited recognition of same-sex marriages under Federal law

• Section 3 definitions of “marriage” and “spouse” are unconstitutional

Windsor does not require a state to recognize same-sex marriages performed in other state, nor does it require a state to permit same-sex marriages

78


Pre-Windsor

Simpler for plan administrators For ERISA and IRC, same-sex couples not married regardless

of provisions of state law

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Post-Windsor

Many unanswered questions • Should Windsor be applied retroactively?

• Does employer in Missouri have to recognize same-sex marriage of employee who is validly married under the law of another jurisdiction?

• Very fluid situations – lots of lower court decisions generally favoring recognition of same-sex marriages

80


Current state of law • IRS ruling (State of Celebration Rule): Same-sex couples treated

as married under IRC, so long as married in state which authorizes same-sex marriage, even if couple is domiciled in state which does not recognize same-sex marriage

− Does not apply to domestic partnerships and civil unions − Full retroactivity under IRC so long as statute of limitations

open • Employers may cover legally married same-sex spouses under

medical plan without taxation to employee • Employees may receive tax-free reimbursement for expenses

incurred by same-sex spouses under FSAs • Same-sex spouses entitled to special enrollment rights under

HIPAA • An increasing number of states by vote or decree recognize same-

sex marriage 81


Current state of law (cont’d.) • Same-sex spouses are legally entitled to qualified joint and

survivor annuity and pre-retirement survivor annuity under qualified pension plans

• Same-sex spouses entitled to 100% of participant’s 401(k) account upon participant’s death unless same-sex spouse consents to another beneficiary

• Same-sex spouses may roll over distributions to their own IRAs

• By Executive Order of Governor Nixon, Missouri will accept jointly filed tax returns from same-sex couples legally married in another state

82


Employer Decisions

REVIEW DEFINITIONS OF “SPOUSE” IN ALL PLAN DOCUMENTS Will employer welfare benefit plans recognize same-sex spouses?

• ERISA does not require same-sex coverage in a medical plan Await further guidance concerning retroactivity, especially survivor

annuity rights under ERISA When to amend retirement plan documents relating to definition of

spouse If prior to Windsor employer was providing same-sex spousal

coverage, determination whether employer wants to claim employment tax refunds on imputed income

83


Contact

Jonathan Igoe [email protected]

314.621.5070

84



The National Labor Relations Board and Department of Labor in 2014 It could be a very bumpy ride

John Vering Presented by



Agenda

National Labor Relations Board in 2014 • New Election Rules • Continued emphasis on Handbooks at non-union workplaces • Emphasis on duty to provide information to established

unions Department of Labor

• Already have new requirements for Federal Contractors encouraging employment of veterans and the disabled under Amended ADA

• Advice exemption to Persuader Reporting likely being eliminated


National Labor Relations Board

Fully constituted and senate confirmed Board and General Counsel. The Supreme Court might order the new Board to revisit

decisions of the previous Recess Appointed Board. While the Board rules on cases and can make new law, the

General Counsel decides what cases to litigate and what new areas of the law to pursue and bring to the Board. The GC has stated a number of priorities:


NLRB General Counsel Agenda

A Union’s Right to Financial Information of Privately held companies Aggressive use of 10( j) injunctions Aggressive use of investigative subpoenas First contract bargaining cases Social Media Handbooks Arbitration Agreements – class waivers


NLRB Agenda

New Election Procedures • First proposed June 2011 and went into effect in April 2012. • Stayed pending legal action in the D.C. Circuit. • Board voluntarily dismissed its appeal on December 9, 2013. • The newly confirmed Board reissued on February 6, 2014 without

an issue over whether the Board has a lawful quorum. Notice of Employee Rights under the NLRA

• On January 7th the Board announced it will not proceed with requiring employers to post but is keeping it available if employers or employees want to post it.

• Federal contractors are still required to post pursuant to Executive Order of the President.


New Proposed Election Rules Current Rules New Rules

Initial hearing 7-14 days from filing of petition for election.

Presume 7 days. More difficult to get a postponement.

Most voter eligibility issues could be eliminated prior to the election at hearing.

Only issues that relate to whether a QCR exists.

Presume post-hearing briefs. Post-hearing briefs only upon request.

Presume election 42-days after petition (if no hearing).

Presume election 7-14 days after petition.

Request for Review of decision allowed.

Requests for Review only granted in extraordinary circumstances.

Post election appeal a right. Post election appeal at Board discretion.


Why is 42 Days Versus 10 Days Important Petition filed (1) (2)

Letter to homes about petition

(3) (4) Letter to home with election details

(5) (6)

(7) What is a union?

(8) Posting 1 Constitution

(9) (10) Posting 2 financials

(11)

(12) Posting 3– Oath of loyalty Speech #1; letter to homes #3

(13)

(14) Dues

(15) Posting 4 Dues calculation

(16) (17) Posting 5 What could you buy?

(18) (19) Posting 6 Dues vs. 401(k) Speech #2; Letter to homes #4

(20)

(21) Collective Bargaining

(22) Posting 7 CB defined

(23) (24) Posting 8 Could lose in bargaining

(25) (26) Posting 9 Union Security/Dues checkoff Speech #3; letter to homes #5

(27)

(28) Strikes

(29) Posting 10 What is a strike?

(30) (31) Posting 11 History of union strikes

(32) (33) Posting 12 – permanent replacements; Speech 4; letter to homes #6

(34)

(35) We are a good employer

(36) Posting 13 – reminder of good benefits and pay

(37) 25th Hour Speech – final letter to homes

(38) 25th Hour Speech

(39) NO CAMPAIGN MEETINGS

(40) ELECTION

(41)


Micro Units

A result of the NLRB decision in Specialty Healthcare. • So long as the petitioned for unit consists of a readily

identifiable group of employees the Board will presume it is appropriate.

• Why do we care? − Smaller units are easier to organize, easier to organize quietly

and quicker to organize.

− The standard coupled with the new election rules virtually eliminates any chance at a hearing to get a delay.


Continued Focus on Non-Union Employers

Non-union employees still have the right to engage in protected concerted activity and the Board wants that group to know it.

• Talk about their benefits, pay, bonuses, supervisors, bosses, etc.

• Talk about those issues to the media, on social media, etc. • Talk about those issues using your company e-mail.


Why the Focus on Non-Union employees and election issues?


How the DOL intends to Help Create a U-Turn By all but eliminating the advice exemption to the “persuader

rule” What is the “persuader rule”?

• Under the Labor Management Reporting and Disclosure Act (LMRDA) both employers and labor consultants are required to report financial arrangements and payments between each other for either direct or indirect persuader activities.

• Examples – flyers, speeches, letters to the home etc.

• If a lawyer provided advice about how to lawfully communicate in compliance with the NLRA than the “advice exemption” provided that no reporting was required.


What Is DOL Changing?

Under the proposed rule a report will be required if the activity will result in indirect persuader activity or direct persuader activity regardless of whether it is also advice. What does the DOL consider reportable activity?


Examples of Reportable Activity

Persuader activities: Any activity to be performed where the object thereof is to directly or indirectly persuade employees concerning their rights to organize or bargain collectively through representatives of their own choosing, or the right to engage in any protected concerted activity in the workplace.


Examples Continued

Drafting, revising, or providing written materials for presentation, dissemination, or distribution. Drafting, revising, or providing a speech for presentation to

employees. Drafting, revising, or providing audiovisual or multi-media

presentations for presentation, dissemination, or distribution to employees. Drafting, revising, or providing website content

for employees.


Examples Continued

Planning or conducting individual or group employee meetings. Developing or administering employee attitude surveys

concerning union awareness, sympathy, or proneness. Training supervisors or employer representatives to conduct

individual or group employee meetings. Coordinating or directing the activities of supervisors or

employer representatives. Establishing or facilitating employee committees.


Examples Continued

Developing personnel policies or practices. • Solicitation and distribution policies

• Bulletin board

• Access • Social media

• Workplace investigations

• Confidentiality

• Pay and benefits

• Pro-employee/open door philosophy • Alternative dispute mechanism


Examples Continued

Deciding which employees to target for persuader activity. Conducting a seminar for supervisors or employer

representatives.


Why should I care?

The President and Treasurer of your organization are personally responsible for ensuring the report is filed and filed accurately. Those individuals face federal criminal penalties for failing to

do so as well as civil penalties.


What Needs to Be Reported by Employers

The nature of the relationship Dates entered into Money paid and for what services Who performed the services


What Will Law Firms Have to Report

Not only the receipts from clients for reportable services but all receipts from any client that we performed reportable activities for. All cash disbursements to employees of the firm.


Why Would DOL Do This?

Remember that graph? The hope must be that companies will not want to disclose

how much they spend on their lawyers so they might opt to “go it alone” and see what happens. By going it alone the unions hope companies will be either

too afraid of violating the NLRA to say anything or not aware of what all they actually can say.


Remember it is the Department of LABOR

Labor wants more members. Labor has been losing membership at staggering rates. Labor can’t win the battle as the rules are currently set and is

hoping a combination of changes will tilt the odds in their favor.


Persuader Rule Conclusion

The final rule was due at the end of November but has been pushed back to March of 2014. We expect legal challenges that will hopefully stay the

implementation or enforcement. The ABA submitted a strongly worded comment in opposition

to the proposed rule as eviscerating the attorney-client privilege. We are hoping for a final version that keeps in place the

advice exemption for Attorneys but not Labor Consultants as President Clinton attempted to put in place.


Other DOL Initiatives

OSHA • Infectious Disease Standards

− At the pre-rule stage and designed to develop regulations to reduce the risk of worker exposure to infectious diseases, particularly in healthcare settings.

• Injury and Illness Prevention Program − By September 2014 OSHA plans to issue a proposed rule

requiring employers to implement an Injury and Illness Prevention Program.


Other DOL Continued

Electronic Recordkeeping • Recently issued proposed rule would require employers to electronically

file certain injury and illness data and make it publicly available. Comment period expired Feb. 6, 2014.

Whistleblower Protection • Expecting final rules establishing procedures for filing whistleblower

complaints under: the Affordable Care act of 2010; Section 806 of the Corporate and Criminal Fraud Accountability Act of 2010; National Transit Systems Security Act; Surface Transportation Assistance Act; Federal Railroad Safety Act; Consumer Financial Protection Act; Seaman’s Protection Act; FDA Food Safety Modernization Act; and the Moving Ahead for Progress in the 21st Century Act.


Other DOL Continued

Other Safety Standards • Comment period on proposed rule on occupational exposure to

crystalline silica expired December 2013.

• Occupational exposure to beryllium and combustible dust. Office of Federal Contractor Affirmative Action Requirements

• By April 2014 we expect to see another OFCCP rule specifically for the construction industry updating goals based on more recent data as the current goals are based on data from the 1970’s.

• By May 2014 OFCCP plans to issue proposed rules revising sex discrimination guidelines for federal contractors and subcontractors.


Other DOL Continued

Wage and Hour Division • By March 2014 we expect WHD to issue a revised definition of

spouse under the FMLA consistent with the Supreme Court decision in United States v. Windsor.

• We expect WHD to move forward with an initiative requiring employers to affirmatively inform employees of their status as either an employee or independent contractor and the basis for how their pay is computed.


Contact

John Vering [email protected]

816.221.3420



Employer Liability for Distracted Driving Shelley I. Ericsson Presented by


The Problem - Overview

Distracted driving is a serious problem

• Attributable for 28% of all U.S. crashes annually

− This equals 1.6 million crashes, causing 636,000 injuries and 10,000 deaths annually

− At least 170,000 crashes annually are directly attributable to the texting while

driving − Studies show that talking on the phone while driving carries the same risk as

driving with a .08 blood-alcohol level National Safety Council, “Summary of Attributable Risk Estimate Model”; Human Factors; The Journal of the Human Factors and Ergonomics Society, 2006 (Summer), 381-391.



The Problem – Overview

According to the National Highway Traffic Safety Administration (NHTSA):

• 80% of crashes caused by driver inattention • Biggest sources of inattention is cell phone use • Most drivers think they are more skilled than other drivers when it

comes to multitasking while driving • Drivers distracted by mobile devices 4x more likely to have

accident • More and more instinctive and second nature to immediately

respond to incoming text or email immediately U.S. Dept. of Transp., “Statistics and Facts about Distracted Driving”




What are the Costs to Employers?

Any business for which employees use cell phones while driving faces liabilities in the form of financial losses

• Legal judgments

• Increased insurance premiums • Workers’ compensation claims

• Fines and repair costs NHSTA estimates that on-the-job accidents cost employers

over $24,500 per crash, $128,000 per injury, and $3.8 million per fatality

NHSTA, “The Economic Burden of Traffic Crashes on Employers”


Basis for Employer Liability from Employee-Caused Accidents

There are a variety of different legal theories under which the employer may be found liable for the actions of an employee:

• Respondeat Superior Liability

• Negligent Hiring, Retention and Supervision

• Negligent Entrustment OSHA implications:

• OSHA Asst. Sec. of Labor publicly announced to employers “It is your responsibility and obligation to have a clear, unequivocal and enforced policy against texting while driving . . . “

General Duty Clause, Section 5(a)(1) will be deemed violated if work is structured in a way that requires employee texting.


Hoskins v. King 676 F.Supp.2d 441 (S.C.D.C. 2009)

Sharon King serviced medical equipment for Siemens Medical Solutions and was issued a company car and cell phone. King was on vacation when she ran over and killed Thomas

Hoskins, who was cycling. At the time of the accident, King was talking on her cell

phone and tending to her two dogs. Hoskins’ widow sued Siemens under the respondeat superior

and negligent supervision theories and sued King for negligence.


Respondeat Superior Liability

Respondeat Superior Liability “holds the master liable for the acts of his servant.” To establish liability for the master, the injured party must

show that the servant was acting within the course and scope of the master’s business.


Negligent Supervision

A master may be liable for negligent supervision, even for acts outside the scope of employment, if the master knows or should have known that employing a specific servant created an undue risk of harm to the public. An injured party may claim that the master acted negligently

in entrusting his servant with a tool that created an undue risk of harm.


Negligence

Negligence requires proof of 1. A duty to a Plaintiff;

2. A breach of the duty by a negligent act or omission; 3. Proximate causation, and;

4. An injury or damages. Punitive damages are available if there is clear and

convincing evidence that a Defendant’s conduct was willful, wanton, or in reckless disregard of a victim’s rights.



King was on vacation returning from her wedding reception. King had removed all of her work equipment from the car

prior to her vacation. King was talking with her best friend. The court found that Siemens was not responsible for Hoskins’ death because King was not acting in the course and scope of her employment.



What if King had been talking to her boss or to a customer? What if King had been driving to a work assignment?


Negligent Supervision

Hoskins was killed in October 2007. King had received speeding tickets in March 2005 and March

2007 but had no points on her license when hired. King rear-ended another car in January 2007 during working

hours. She may have been on her cell phone. King was not speeding when the accident occurred.


Hoskins v. King (cont.)

The court found that King’s past conduct did not rise to a level that Siemen’s was on notice that King presented an unreasonable risk of harm to the public. What if King had been involved in two prior accidents while

talking on her phone? What if King had been speeding?


Negligence and Punitive Damages

King was talking on the phone, attending to her dogs and adjusting the radio in the minutes before the accident. The court found that King’s conduct was clearly indicative of

negligence. The court also found that the evidence was sufficient to

justify an award of punitive damages against King.


Hunter v. Modern Continental Construction Co. 287 Ga. App. 689 (2007)

Stasium was a shift supervisor for Modern who was involved in an accident with Hunter while Stasium was on his way to work. Stasium had called a co-worker around the time of the

accident. The co-worker called Stasium back around the same time but Stasium did not answer. Stasium had given his cell phone number to all his co-workers

so he could be contacted regarding company business.


Hunter (cont.)

The evidence was sufficient to create a factual issue regarding respondeat superior liability.

Stasium could have been using the phone or distracted by the unanswered call.

What if Stasium had not been using his phone on the way to work?



Montgomery v. State 369 S.W.3d 188 (Tex. Crim. App. 2012)

Montgomery hung up from a cell phone call and realized that she had just passed her exit. Montgomery was driving slowly and abruptly changed lanes.

A faster moving truck swerved to avoid Montgomery. The truck clipped Montgomery’s car and Montgomery then hit

Terrell Housley’s pickup truck. Housely’s pickup flipped and ejected the passenger Chance

Wilcox. Wilcox died as a result of a broken neck.


Montgomery (cont.)

Montgomery was convicted of criminally negligent homicide and sentenced to 10 years imprisonment and a $10,000 fine.



What’s an Employer to Do? Preventative Measures


Management Recognition of the Concern

Recognize and deal with the barriers

• Lack of employee support • Competing job priorities

• Lack of management commitment


Development of a Distracted Driving Policy

There are many examples available • Industry Groups

• Insurance Companies • Government Sources

• The Web There is no one set formula Feel free to modify one to reflect your culture Modify policy to reflect the formatting of your current policies


Build Employee Support and Buy-In

Acknowledge the culture change Make practical suggestions

• Plan trips so that calls are unnecessary

• Don’t schedule conference calls during travel times • Change voicemail greetings

• Pull over for calls


Document Compliance

Get acknowledgments Consider “pledge forms”

TAKE THE PLEDGE The fight to end distracted driving starts with you. Make the commitment to drive phone-free today. Distracted driving kills and injures thousands of people each year. I pledge to: Protect lives by never texting or talking on the phone while driving. Be a good passenger and speak out if the driver in my car is distracted. Encourage my friends and family to drive phone-free.

SIGNATURE: _____________________________________________________________ DATE: ___________________________________________________________________


Re-enforce the Policy

Have a thank you message delivered a month or two after implementation Include the message from time to time in employee

communications Do scary public service pieces from time to time


Chatman v. Coca-Cola (TX) 2012 Jury Awarded $24 million

A Texas jury awarded $24 million ($10 million in punitive damages and $14 million in actual damage) to a woman who was injured by a Coca-Cola driver talking on her cell phone. The suit claimed that the victim had to undergo lumbar

surgery after the Coca-Cola vehicle hit her car. Court held that even though Coca-Cola had policy in place,

that policy alone was insufficient as a defense and Coca-Cola was negligent


Policy Alone Does Not Absolve Employers of Liability

Many companies already have policies in place banning cell phone use Few, if any, have procedures in place to enforce policies To avoid or reduce employer liability:

• Policy in place

• Disseminate/train employees • Monitor/Enforce Compliance

• Practice what you preach


Questions?


Contact

Shelley I. Ericsson [email protected]

816.221.3420



The EEOC’s Strategic Enforcement Plan: How the EEOC’s National Enforcement Priorities May Impact Your Business

Dione C. Greene Presented by


Government Shutdown


EEOC’s 2013 Results – Employers Paid Record Amounts in Settlements

The EEOC’s administrative division raked in $327.1 million in voluntary payments from private sector employers in FY 2013

FY 2013’s voluntary payments are highest in EEOC’s history

Of the settlements reported in 2013, 63 involved allegations

of systemic discrimination and accounted for approximately $40 million in payments.


EEOC Strategic Enforcement Plan

Combat employment discrimination through strategic law enforcement Prevent employment discrimination by education and

outreach Deliver service through a skilled and diverse workforce and

effective systems


The EEOC’s Strategic Enforcement Plan (“SEP”): 6 National Enforcement Priorities

1. Eliminating barriers in recruitment and hiring 2. Protecting immigrant, migrant and other vulnerable

workers 3. Addressing emerging and developing employment

discrimination issues 4. Enforcing equal pay laws 5. Preserving access to the legal system 6. Preventing harassment through systemic enforcement and

targeted outreach


Today’s Agenda

Today we’ll focus on: • Eliminating Barriers in Recruitment and Hiring

• Addressing Emerging & Developing Issues

• Employer Best Practices


Eliminating Barriers in Recruitment & Hiring

Racial, ethnic, and religious groups, older workers, women and people with disabilities continue to confront discriminatory policies and practices at the recruitment and hiring stages. In order to remove “barriers” to recruiting and hiring, the

EEOC will target: • class-based intentional hiring discrimination; and • facially neutral recruiting and hiring practices that adversely

impact particular groups.


Eliminating Barriers in Recruitment & Hiring (cont.)

Policies and Practices Under Heightened Scrutiny: • The channeling/steering of individuals into specific jobs due

to their status in a particular group

• Restrictive application processes

• The use of screening tools (e.g. pre-employment tests, post-

offer tests, background checks)


Substantial 2013 EEOC Verdicts & Settlements

$920,000 Settlement – EEOC v. Sedona Group • The EEOC alleged that this staffing company engaged in a

pattern and practice of classifying and failing to refer job applicants based on their race, color, sex, national origin, age or disability.

$900,000 Settlement – EEOC v. It’s Just Lunch USA, LLC • The EEOC alleged that the company refused to hire men as

dating directors and sales representatives


Substantial 2013 EEOC Verdicts & Settlements

$700,000 Settlement – EEOC v. Presrite Corp. • The EEOC alleged that the company engaged in a pattern of

refusing to hire women for metal forging jobs Employer Wins Dismissal of EEOC’s Lawsuit – EEOC v. Freeman

Companies • A District Court held the EEOC’s evidence was unreliable and

that the EEOC failed to show the employer’s background check policies created a disparate impact in violation of Title VII


Best Practices for Employers: Job Applications & Postings

Review your job postings and advertisements Recruit in a way that grants access to a cross section of the

protected classes Be vigilant in how you distribute job applications – train your

hiring personnel that they cannot refuse to give employment applications to people based on stereotypes and assumptions


Best Practices for Employers: Pre-Employment Tests

If you require job applicants take a test, the test must be necessary and related to the job. Remember that you may not use a test that excludes workers

age 40 or older if the test is not based on a reasonable factor other than age.


Best Practices for Employers: Credit Checks

Credit Checks - Avoid inquiries into an applicant’s credit rating, assets or liabilities, including bankruptcy filings or garnishments – these inquiries tend to impact more adversely on minorities and females. Exceptions exist if the employer can show that such information is essential to the job in question.


Best Practices for Employers: Criminal Background Checks

Criminal Background Checks – Avoid disqualifying applicants simply because she has an arrest or conviction. Remember your background check “checklist”:

• Analyze convictions – not arrests

• Business Necessity − Consider:

• The nature of the offense

• The amount of time that passed

• The nature of the job sought


Addressing Emerging & Developing Issues

In order to prevent new and emerging discriminatory practices, the EEOC will monitor recent legislation, judicial and administrative interpretations, significant events, and it will facilitate early compliance with the law.


Addressing Emerging & Developing Issues (cont.)

What areas of the law are believed to be emerging employment issues?

• Certain ADA issues, including: expanding ADA coverage, monitoring the provision of reasonable accommodations, strict leave policies, qualification standards, undue hardship and direct threat.

• Accommodating pregnancy-related limitations under the ADAAA and the PDA

• Coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions, as they may apply


Addressing Emerging & Developing Issues: Drug and Alcohol Testing

The EEOC contends that a company’s random alcohol testing of probationary employees violates the ADA’s medical testing provisions, arguing that a company is permitted to administer alcohol testing only when it has “a genuine and reasonable belief based on objective evidence that an employee is impaired by alcohol.” Section 102(d) of Title I of the ADA prohibits employers from

using medical testing or making inquiries as to whether an employee is disabled, or as to the severity of the disability, “unless such examination or inquiry is shown to be job-related and consistent with business necessity.”


The EEOC has challenged allegedly discriminatory tests and qualification standards.

The EEOC has scrutinized employers’ use of personality tests in hiring on the theory that such tests “tend to screen out” those who suffer from certain disabilities.


Addressing Emerging & Developing Issues: Unpaid Leave as a Reasonable Accommodation

In EEOC v. Verizon the EEOC argued that Verizon’s attendance policy violated the ADA because it allegedly disciplined employees for absences including those related to a disability. In the EEOC’s words, this policy amounted to a “no fault” leave policy Similarly, in EEOC v. Denny’s, Inc., the EEOC sued Denny’s for

enforcing a six-month maximum medical leave policy. The EEOC currently concedes that employers need not grant

requests for indefinite leave.


Addressing Emerging & Developing Issues: Unpaid Leave as a Reasonable Accommodation

In EEOC v. Interstate Distributor Co., the EEOC brought suit on behalf of hundreds of Interstate employees, alleging that the company denied them reasonable accommodations and then fired them pursuant to its unlawful maximum leave policy. The EEOC claimed that the employer violated the ADA because

it allegedly terminated its employees if they requested more than 12 weeks of leave instead of attempting to determine whether it would be reasonable to provide additional leave as an accommodation.


Addressing Emerging & Developing Issues: EEOC’s Guidance on Caregiving Responsibilities Reflects An Increasingly Aggressive Position

In 2007, the EEOC issued enforcement guidance entitled “Unlawful Disparate Treatment of Workers with Caregiving Responsibilities” “Although the federal EEO laws do not prohibit discrimination

against caregivers per se,” it states that “there are circumstances in which discrimination against caregivers might constitute unlawful disparate treatment.”



In 2009, the EEOC issued its “Employer Best Practices for

Workers with Caregiving Responsibilities.” The Caregiving Best Practices acknowledges that it is

providing examples of practices that “go beyond federal nondiscrimination requirements and that are designed to remove barriers to equal employment opportunity.”



The Commission hosted a public hearing on February 15, 2012 about “Unlawful Discrimination Against Pregnant Workers and Workers with Caregiving Responsibilities.”



In EEOC v. CTI Global Solutions, in which the EEOC complained that CTI fired three female employees because of their pregnancies. Allegedly, CTI’s CFO told one of the employees that her job would be a “risk” for her because of her pregnancy (and she could not submit medical documentation evincing otherwise); a manager told another employee that her job would be unsafe for her while pregnant; and another manager told the third employee that, based on “past experiences,” it “would not be fair” for her to keep her assignment.

The court granted summary judgment for the EEOC on two of the women’s claims because there was direct evidence of discrimination


Addressing Emerging and Developing Issues: Emerging ADA & GINA Issues

EEOC v. Fabricut – The EEOC’s first lawsuit alleging genetic discrimination under GINA

• The EEOC alleged the fabric distributor violated GINA and the ADA by unlawfully asking a job applicant for her family medical history in a pre-employment, post-job offer medical examination. The EEOC alleged further that the offer was rescinded based on the belief that the employee had carpal tunnel syndrome.


Addressing Emerging and Developing Issues: Emerging LGBT Issues

Macy v. Department of Justice Complainant is a transgender woman The EEOC held that claims of discrimination based on

transgender status, also referred to as claims of discrimination based on gender identity, are cognizable under Title VII’s sex discrimination prohibition and therefore may be processed under EEOC’s federal sector and EEO complaints process.


Employer Best Practices

Be aware of your legal obligations under the ADA, ADAAA and PDA; Train managers and staff that will encounter these issues;

Develop, disseminate and enforce a strong EEO policy.


Contact

Dione C. Greene [email protected]

816.221.3420



General Question & Answer Period

For the remainder of the morning, questions will be taken regarding any employment law topic.


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