Written agreement required for special overtime arrangements

This and more in this month's roundup of cases impacting the world of labor and employment law.

01.02.14
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LITIGATION

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).

Fair Labor Standards Act

Written agreement required for special overtime arrangements. The FLSA allows several special arrangements which can alter the traditional full pay for overtime hours for non-exempt employees. This includes the Fluctuating Work Week (FWW) method which allows pay of only half-time instead of full time and a half. However, most of these special arrangements require a clear written agreement and signed acknowledgment by the employees. The importance of this was reemphasized in Black v. Settle Pou P.C. (5th Cir., 2013). A law firm paid paralegals and other administrative staff under the FWW method. Everyone knew how the system worked. Employees took the pay. The pay was all done in accord with the FWW requirements, except there was not a signed agreement with each employee. A former employee challenged the pay. The court ruled that the FWW could not apply due to the absence of the signed agreement. The employees were owed a full time-and-a-half the $28.89 hourly pay ($43.33), instead of just the $14.44 half-time for each overtime hour. In addition, the court authorized doubling the employee’s damages to a total of $15,916 for just the one former employee (plus attorney fees) since the law firm should have known better.

Contracts and Insurance

Be careful of the fine print — insurance policy would never pay for defense of employee termination cases. A company obtained employment/​benefits liability insurance. The policy protected it against suits for ​“negligent acts, errors or omissions.” The company fired an employee, who then sued. The company asked the insurance company to cover the defense of the case, but it refused. Discharge was not ​“negligence, error or omission.” A discharge is done with full knowledge, planning and intent on the part of the employer. Therefore, it did not fit the coverage definitions. The policy was useless for covering any employment discharge or suit over loss of benefits due to discharge. Brand & Freilick v. Kansas City Gastroenterology & Hepatology and Travelers Indemnity Co. (Mo. Ct. of App., 2013). The message is to carefully read the definitions and fine print on policies. You may pay for something which does not provide the protection you expected.

Discrimination

Sex

Shaking dirty hands was valid job requirement for salesperson. All sales associates at a furniture store were required to greet customers with a specific greeting and a hand shake. One refused to shake hands, stating that customers’ hands could be dirty, and she refused to endanger her unborn child by shaking multiple hands. The company had available hand sanitizer and stated that no one was expected to hand shake with a customer who had obvious signs of cold or other illness, or real dirtiness. The associate still refused and was fired. She filed a Title VII pregnancy discrimination case. The court dismissed. The Pregnancy Discrimination Act has no reasonable accommodation requirement. It just prohibits treating the pregnant employee differently than others. Since all sales associates were required to shake customers’ hands, there was no different treatment. So, though the plaintiff’s concerns may have been sincere, and even had a health-based foundation, she was not treated discriminatorily. Lewis v. Aaron Sales & Lease Ownership, Inc. (M.D. Fla., 2013).

School superintendent’s assistant has harassment and retaliation case. A school district attorney made some vaguely sexual remarks to a female administrative employee. Then he was appointed Superintendant of Schools and transferred her to be his personal assistant. He engaged in a series of very overt sexual comments, texts and propositions. She objected. He continued and culminated in sexually overt and profuse emails soliciting her to accompany him on a business trip. She complained to the School Board. The next day, the Superintendent transferred her to an office with no heating, no air conditioning, no phone and no office supplies. He then demoted her, reducing her annual pay by almost $20,000. She sued. The court denied summary judgment to the School District, finding no logical explanation for the actions except harassment and retaliation. Johnson v. Scott County School Bd. (W.D. Va., 2013).

Race and Retaliation

Permanent assignment to midnight shift. A police department’s only African American officer filed an EEOC complaint regarding denial of promotions. He was then promoted to Sergeant, and promptly assigned to the midnight shift, where he remained year after year. In spite of repeated attempts to move to ​“any other supervisory assignment,” he was consistently ignored or passed over. He then filed a race and retaliation case under Title VII and 42 U.S.C. §1983. The court found sufficient evidence of retaliation. The midnight shift had such restricted duties that its Sergeant in reality had no authority and no supervisory position; it significantly diminished responsibility and career growth. The evidence supported the claim that he had been permanently sidetracked to the night shift, with intent to keep him there, in retaliation for having made the original EEO complaint. Lavalais v. Village of Melrose Park (7th Cir., 2013).

Disability

Intentional scent harassment. A county jail dental assistant had severe reactions to scents. She requested accommodation of having air fresheners and sprays removed from break areas and restrooms. The sheriff’s office took no action. Then other employees, allegedly including the dentist she worked for, began planting cotton balls and paper towels soaked with strong scents and strong dental medications around her work area and by where she kept her coat and purse. The dentist told her she was ​“psycho” when she complained about the scents. The dental assistant suffered severe facial swelling, breathing difficulties, vision impairments and increased blood pressure due to the strong scents, and missed work. In spite of repeated complaints about the ongoing problems and the planted scents, the sheriff’s office failed to even investigate. The court found ample evidence for an ADA case. Mitter v. County of DuPage (N.C. Ill., 2013).

Religion

Saleswoman harmed by company owner’s religious principles. A Catholic was the only female in the sales force of a company owned by a member of the Protestant Reformed Church. Most other salesmen were also members of the owner’s church. The saleswoman was fired for low sales. She sued under Title VII and Michigan’s EEO law for sex and religious discrimination. The court found in her favor. The evidence showed that all salespeople had a slump when the economy tanked. However, the owner denied the saleswoman the chance to develop accounts in other areas, stating that under his religion women should stay home and care for their families and overnight travel out of the immediate area would violate this role of women; she should not be ​“doing a man’s job.” Men, though, were allowed to expand their territories at will. If she had an out-of-the-area prospect, it was assigned to a man for follow-up. New cold call account opportunities were also assigned to other salesmen who were members of the owner’s church; he told the saleswoman that he could not trust her as much since she was of a different religion than he and the others. The court found ample evidence that the company denied the saleswoman a fair chance to make sales, while enhancing the chances of the salesmen based on gender and religion. Zsenyuk v. Kams, Inc. (E.D. Mich., 2013).

Homeland security should have accommodated three-inch ​“sword blade” for Sikh agent. An IRS agent converted to the Sikh religion and began wearing faith-based articles including the Kirpan, a short, curved sword. She was informed that this violated the security provisions for federal buildings, prohibiting any blade over 2 ¹⁄₂ inches. She offered to wear a three-inch blunted blade, and the Sikh Coalition verified that any shorter blade was not allowable as a valid Kirpan. The agent insisted on the need to wear her religious symbol, and was fired for inability to be admitted to the building where she worked. She sued the IRS and the Homeland Security Administration under both Title VII and the Religious Freedom Restoration Act (RFRA). The Title VII case was dismissed because it generally covers only the employer as a defendant. The employer, IRS, did not make or enforce the building security decisions. The NSA made the decisions but was not her ​“employer.” However, the NSA was covered by RFRA. The government is required to accommodate religious issues unless there is a ​“compelling interest” to do otherwise. The court found that NSA’s categorizing a three-inch blunted Kirpan as a ​“dangerous weapon” was unreasonable, while allowing 2 ¹⁄₂ inch fully-sharpened knives of other sorts. Further other federal buildings had made accommodations for longer Kirpans, and RFRA accommodation guidelines require individual assessment of actual dangers in making exceptions for items which might otherwise be on the ​“dangerous weapons” list. Tagore v. USA (5th Cir., 2013).

Age and National Origin

Hotel employees validly fired for extortion of gay waiter. Two 51-year-old hotel workers, one Filipino and one native Hawaiian were fired for misconduct. They filed age and Title VII national origin cases. The court found that the hotel had a valid non-discriminatory basis for the discharges. Other workers had reported the two were harassing a hotel waiter due to his homosexuality. Investigation showed evidence that they demanded $2 from him each time he requested a tray of drinks or needed restaurant tables set up. They punched him if he did not pay. They were heard threatening to choke the waiter if he did not open his wallet for them. When called in for questioning, the two claimed that the waiter had been sexually harassing them. After the termination, both were replaced by people younger and of different national origins than they. The court found no evidence of any sexual harassment by the waiter. Further, the two fired employees failed to use the company’s harassment policy to report any harassment until they were the subject of a disciplinary investigation. Their claim lacked factual evidence and credibility. There was no showing of pretext in the discharge, and no evidence anyone younger or of a different origin ever did similar acts without being discharged. The case was dismissed. Freitag v. Kyo-ya Hotels (D. Haw., 2013).

Uniformed Services Employment and Reemployment Rights Act

A reminder to keep those on active duty in mind and hold promotions for when they return. USERRA guarantees that upon return from active duty employees must be restored to the positions they would have had but for the time away. This includes promotions or upgrades which became available. In Rivera-Melendez v. Pfizer Pharmaceuticals LLC (1st Cir., 2013), the court ruled that the company violated USERRA by not providing reinstatement to a promotion which came open, the employee was not notified of, but had a ​“reasonable chance” of being selected for had he applied. This case does not mean active duty employees must be guaranteed any promotion which comes available. Rather, it seems to mean that they must be given reasonable notice of all opportunities, a reasonable time to apply (considering their absence, overseas placement and the difficulty of meeting short ​“posting” deadlines). Then if they are chosen, the position must be available for them upon return (perhaps filled by a temporary or ​“acting” employee until that time).