Labor & Employment Law Update

Labor & Employment Update – March 2013


Who is covered? IRS proposed rules on health care coverage. Employers of 50 “full time equivalents” must cover “full time” employees under the Affordable HealthCare Act. The IRS has proposed guidelines on how to calculate “equivalents,” when is someone “full time,” and how to determine if those with fluctuating work schedules are “full” or “part” time. The rules have different definitions than DOL uses for Title VII, FMLA, ADA, etc. An employer might have 50 employees for DOJ-FMLA coverage, yet not have 50 employees under the IRS-AHCA rules. The new IRS rules require more calculations and have more sorts of “qualifying time” measurement periods than employers are used to under the existing DOJ regulations.

Revised FMLA posters. March 8, 2013 is the date for posting of the revised federal FMLA postures which include new military care and exigency leave provisions.

OFCCP’s new directive on use of criminal records in hiring. Following the lead of the EEOC, the Office of Federal Contract Compliance Programs has issued a directive cautioning that excluding applicants due to conviction records may have a discriminatory adverse impact on race and national origin. The directive references EEOC’s guidelines which were issued in 2012, as well as the Fair Credit Reporting Act requirements on background checks. In addition, the directive cites the benefits employers might receive by hiring people who do have a criminal record, through the Work Opportunity Tax Credit and the Federal Bonding Program.


The Legal Update includes new developments and matters of interest throughout the United States. Be aware that our various federal circuit courts reach somewhat differing conclusions. So a federal court decision in another part of the country, and especially a different state’s court decision, may not quite be “the law” in your jurisdiction. Some courts lead the way; others lag behind. The Legal Update lets you see the overall trends and compare them with your jurisdiction. Wisconsin is part of the Federal Seventh Circuit (Wisconsin, Illinois and Indiana).

Constitutional Rights

HR manager had no free-speech protection to write private article against gay rights; top officials have fewer rights. Being at the top is not always a good thing. A university Vice President of HR was fired after writing a private opinion letter to a local newspaper objecting to the comparison of the gay rights movement with the civil rights movement for racial equality. The letter expressed indignation that “those choosing the homosexual lifestyle should be considered as civil rights victims.” The article implied that gay people should not be afforded the same rights as African Americans. The fired VP sued, claiming a violation of her constitutional rights to express social and political views on her private, non-work time. The court dismissed the case. A Vice President of HR is in a policy-making position. She was in charge of implementing and enforcing the university’s EEO policies which clearly included protecting rights and equal treatment on the basis of sexual orientation. A policy developer cannot undermine the key policies they are supposed to enforce without also destroying the public trust in the policies and the organization’s effectiveness, even if the comments are off the job. There is far less off-the-job for top officials. A person who publicly expresses distain for the policies they are supposed to be responsible for should not be in that job. Dixon v. U. of Toledo (6th Cir., 2013).

Unfair Discharge Cases

Right to have weapon in car on company parking lot does not include displayingy it to other employees. In a case which may seem very unfair, a court ruled that Kentucky’s Conceal Carry law does not extend to showing. Forty-nine states have laws allowing people to carry concealed weapons. Employers can generally ban weapons from the work premises, but must allow firearms in cars in the company parking lots. An employee was working on the exterior of the company building, along with a security guard. They were talking about guns. On a break, the employee told of his new 45 caliber handgun. The security guard asked to see it. They went to the employee’s car. The employee got the gun, took out the magazine and showed the gun to the guard, as had been requested. The security guard then reported the employee for having violated the company’s weapons policy. The employee was fired. He then sued under Kentucky’s State Code 237.106, the right to have weapons. The statute gives the right to have a weapon in the car, in the parking lot. There is no provision in the statute regarding a right to display the weapon. “Unfairness” is not the legal standard. There are many unfair situations which are not covered by law. To have a case, the situation must fit the specific provisions of a particular statute. This situation did not. Korb v. Voith Industrial Services, Inc. (W.D. KY, 2013).

Department manager fired for telling jokes and non-cooperation in investigation. A department manager was alleged to have engaged in discriminatory behavior in employment decisions and in the telling of a variety of “off-color” sexual and racial jokes. In the company’s investigation, the manager was uncooperative and gave misleading answers. The company investigation cleared him of the charge of discriminatory decision-making. He was then fired due to his lack of cooperation and violating company policy by telling the improper jokes. The manager sued under state law for improper discharge. The court ruled for the company, finding that a fear of future liability due to the manager’s discriminatory jokes and comments were a valid reason for discharge. Not cooperating in the investigation was yet another valid reason for discharge. McGrory v. Applied Signal Tech, Inc. (Cal. Ct. App., 2013). This case illustrates the fact that the “victims” of harassment are not just those on the receiving end. Often the biggest victims are those who continue to engage in offensive, unprofessional behavior and lose their job, career, reputation and future income. [For more information, read the article It Was Just a Joke by Boardman & Clark regarding how improper humor becomes key evidence in later cases.]

Fair Labor Standards Act

$12,000 wage claim turns into $700,000 verdict. A Sales Territory Manager challenged his salaried-exempt status and asked for $12,000 in overtime pay. The company claimed he was covered by the Administrative Exemption. The initial decision found that the employee did not do enough “high level work” to qualify as exempt and should be paid the $12,000. The company decided to dig in its heels and use this as a “test case” because it had other similar positions which could also be affected. After extended litigation and appeals, the end result was double damages for the employee ($24,000) plus $700,000 in legal fees and costs awarded against the company due to the protracted litigation. Fiore v. PPG Industries, Inc. (169 Wash. App., 2012).



El Viejo has case for discrimination and retaliation. A 57-year old assistant bakery manager presented sufficient evidence for a valid retaliation and age discrimination case. He was discharged after complaining to human resources about harassment from his department supervisor and the store manager. He was nicknamed “El Viejo” (Spanish for old man), repeatedly called “Oldie” and heard regular comments about firing that old man, “el Viejo esse.” HR conducted no investigation and took no protective action. He was fired soon after the supervisor was informed of his complaint, and was replaced by a young person. Ramirez v. Walmart-Puerto Rico, Inc. (D. P.R., 2013).


Evaluation vs. reality: doctor’s opinion is invalid due to facts of actual performance of job. A maintenance employee was discharged after failing a hearing test and the doctor’s determination that he could not hear sufficiently to perform the essential functions of the job. He sued under the ADA. The facts showed that the employee had been hearing impaired since 1980. He had performed his job satisfactorily for 18 years doing the essential functions with no problems. The court found the test and discharge invalid. The doctor’s opinion failed to take into account the reality of actual work accomplishment. Further, the company made no effort to do a “reality check” and match the known work performance against the test result; nor did it seek to explore any reasonable accommodation potential, or the required interactive process, before summarily discharging the employee. Goeden v. Darigold, Inc. (D. Idaho, 2013).

National Origin

Extra I-9 requirements for non-citizens result in $250,000 settlement. A food service company has settled a Department of Justice charge that it violated the anti-discrimination provisions of the Immigration Act by requiring non-citizen hires to go to extra lengths to provide additional Homeland Security documents, which were not required of U.S. citizens. The company stated that it was acting “out of an abundance of caution” for not violating the law’s prohibition on hiring illegal workers. The law, however, specifies the proper I-9 process, and prohibits making non-citizens or suspected non-citizens to go to extra lengths. DOJ v. Centerplate, Inc. (Administrative Settlement, 2013).

National Labor Relations Act–Arbitration

Firefighter electrocution during demonstration to school children did not warrant firing of crew chief. Three firefighters were doing a demonstration to a group of school children, which included showing off the fire truck. One was by the truck talking to the group; another was operating the equipment. The crew chief was in charge and also giving part of the presentation. The equipment operator raised the truck’s ladder in the standard demonstration manner. Then he swiveled the ladder to the side, which was not standard. It hit a power line. The current raced down the ladder to the truck and electrocuted the other firefighter as he was talking to the children. The Department reacted by firing the crew chief for having allowed this to occur. In the resulting challenge, the arbitrator reversed the discharge. There was no evidence the crew chief had done any wrong. He could not have anticipated that the equipment operator would deviate from procedure and swing the ladder. He could not have reasonably prevented the accident. The Department overreacted. It could validly fire the equipment operator, but not the crew chief. In re Osceola County and International Assoc. of Firefighters #3284 (2013).

No cell phone use means no cell phone use. A bus driver answered his cell phone, told the caller that he could not talk because he was on duty, and hung up. It took two seconds. He was fired for violating the no cell phone while on duty safety rule. The arbitrator upheld the discharge. Even a two-second call violated the clear safety rule. The driver should not have answered the call at all. In re Veolia Transportation and Teamsters Local 683 (2013).

“In the grasp of addiction” was not effective excuse for leaving work, and toilet paper theft did not help. An employee was fired for twice leaving work and returning without punching out. He was gone for several hours. He was already on “probation” for theft of multiple rolls of toilet paper. In the resulting grievance, the employee tried the novel approach of claiming it was not an intentional violation; he was “not responsible for his actions” because he was in the grasp of drug addiction and had to leave work to buy drugs. In that condition, he was not in control enough to clock out. The arbitrator rejected the argument. Presumably after getting the drugs, the employee was again no longer “grasped” by the need for a quick fix. He could have returned and at least punched back in. However, he waited until just before quitting time to sneak back and punch out. The arbitrator weighed in the dishonest act of toilet paper theft and concluded that the employee was not credible. In re Youngstown Hospital Co. and District 1199 Service Employees International Union (2013).