December 17, 2014

NLRB Corrects Itself, Grants Employees the Right to Use Company Email for Labor Organizing

On December 11, 2014, the National Labor Relations Board (NLRB) issued its 3-2 decision in the case Purple Communications, Inc. and Communications Workers of America, AFL-CIO, reversing its reasoning in the 2007 Register Guard case. "We believe," the majority explains, "that the Register Guard analysis was clearly incorrect. The consequences of that error are too serious to permit it to stand. By focusing too much on employers' property rights and too little on the importance of email as a means of workplace communication, the Board failed to adequately protect employees' rights under the (National Labor Relations) Act and abdicated its responsibility 'to adapt the Act to the changing patterns of industrial life.'"

Respondent Purple Communications provides sign language interpretation services to deaf or hard-of-hearing individuals. The company's employees are interpreters who work at 16 call centers nationwide, where they use the company's communications and electronic equipment. Under company policy, employees are strictly prohibited from using any of the company's systems "...to engage in activities on behalf of organizations or persons with no professional or business affiliation with the Company" or to send "uninvited email of a personal nature." Noting the long-standing doctrine that the workplace is the "natural gathering place" where employees would normally exchange information about working conditions and discuss options for acting collectively to improve those conditions, the Board found that employees' ability to communicate at work via email is one sector of this "natural gathering place." The kernel of the Board's reasoning is that an employer's right to regulate the use of its property for communication among employees, whether the property in question is a corkboard or a computer, is outweighed by the rights of employees under Section 7 of the NLRA to communicate and organize.

An employer's property rights do not imply that it can prohibit gathering or communication by employees on its land. There is substantial precedent for the limitation of an employer's ability to control its property; as the Second Circuit explained in its Republic Aviation decision, "inconvenience or even some dislocation of property rights, may be necessary in order to safeguard the right to collective bargaining." According to the Board in Purple Communications, employees' use of email is more analogous to their use of their employers' land and building space. To prohibit the use of either land or email systems by employees "to organize for mutual aid without employer interference" would be to deny them the use of the "natural gathering place" for exercising their rights under the NLRA, and would thus violate their legal rights.

Under the decision, employers will remain able to monitor employees' email communication, and to restrict such communication when the need to do so can be demonstrated (although they also note that such situations will surely be rare). Such monitoring will be lawful "so long as the employer does nothing out of the ordinary, such as increasing its monitoring during an organizational campaign or focusing its monitoring efforts on protected conduct or union activists."

If you believe your rights under the National Labor Relations Act have been violated by an employer, please contact The Harman Firm, PC.

December 15, 2014

Northwestern Mutual Life Insurance Co. Charged With Alienage Discrimination For Failing to Hire Applicant Because He Didn't Have Green Card

On November 14, 2014, the District Court for the Southern District of New York came down squarely in on the side of the Plaintiff in Juarez v. The Northwestern Mutual Life Insurance Company, Inc. The Court denied summary judgment to the defense, in the process endorsing, echoing, and bolstering the plaintiffs' arguments that the defendant had acted unlawfully when it refused to hire Ruben Juarez as an intern because, while he had documents authorizing him to work in the United States, he was not a U.S. Citizen and did not hold a green card.

According to the facts alleged in the complaint, Mr. Juarez, a Mexican national residing in New York, interviewed for a position at Northwestern Mutual on December 11, 2013. After the interview he was contacted again by his interviewer, Susan Lewandowski, who asked him whether he was a U.S. citizen or a green card holder. He explained that he had Deferred Action for Childhood Arrivals (DACA) status, which allowed him to remain in the United States for two years and to obtain an Employment Authorization Document (EAD). He further explained to Lewandowski that his research indicated that he could legally work for Northwestern Mutual without a green card or visa. Lewandowski replied "sorry but you have to have a green card." In fact, on its company website Northwestern Mutual advertises its policy of requiring new interns hold a current student or resident visa.

Juarez alleges that Northwestern Mutual's decision not to hire him based on its policy of requiring all new hires to have either citizenship or a green card amounts to alienage discrimination. Roughly, everyone who is legally present and authorized to work in the United States has equal right to seek employment. As the Court in this case states quite clearly: "The policy alleged in the Complaint--essentially, 'Legal aliens without green cards need not apply'--on its face discriminates against a subclass of lawfully present aliens."

42 U.S.C. §1981, passed as part of the Civil Rights Act of 1866, states: "All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens."

The Court does an impressive amount of work in explaining the application of this statute to the present case, by showing how three legally correct premises imply the validity of the Juarez's claim. These premises are: (1) §1981's protection against discrimination extends to all lawfully present aliens, whether or not they have a green card; (2) a plaintiff need not allege discrimination against all members of a protected class to state a claim under §1981; and (3) a plaintiff can plead intentional discrimination by alleging that the defendant acted pursuant to a facially discriminatory policy requiring adverse treatment based on a protected trait." According to premise (1), Mr. Juarez's rights are equal to those of aliens with green cards, and it is therefore discriminatory to treat him differently on the basis of his specific status as a non-citizen. According to premise (2), the company cannot justify dismissing his complaint by pointing, as they do, to examples of non-citizens who have not been excluded from employment. And according to premise (3), while it is true that, in order to show a violation of §1981, Juarez must show that the discrimination was intentional, the controlling legal doctrine here states that a plaintiff can show this by pointing to a facially discriminatory company policy like the one allegedly followed by Northwestern Mutual.

In the end the Court reaches a strong conclusion, and one that seems to place the plaintiff in good legal position going forward: the Second Circuit and the U.S. Supreme Court have agreed that it is unlawful to create "a subset of aliens, scaled by...how we perceive the aliens' proximity to citizenship." The only distinction that an employer can lawfully draw in making hiring decisions is between legal and non-legal aliens.

If you believe an employer has discriminated against you based on your status as a legal immigrant, please contact The Harman Firm, PC.

December 11, 2014

A Pivotal Moment: U.S. Supreme Court's Decision in Young v. UPS Will Set Precedent For Future Pregnancy Discrimination Cases

Peggy Young had worked as a driver for UPS for seven years when she took leave to undergo in vitro fertilization procedures. The procedures worked, and she became pregnant. When she returned to work, an occupational health manager from the company told her she had to submit a doctor's note so that they could make appropriate restrictions to her job responsibilities. She provided a note from her midwife saying that she could not lift more than 20 pounds during while pregnant, and on the basis of that note UPS decided that she could no longer perform the duties required for her job. Further, they said, since it was UPS's policy not to offer accommodations to pregnant drivers, she would be placed on unpaid leave, suddenly losing both her paycheck and her health insurance at possibly the worst possible time.

Lower courts, including appeals courts, have not been sympathetic to Young's reading of the Pregnancy Discrimination Act of 1978. For example, the Fourth Circuit stated that the law "does not, despite the urgings of feminist scholars...require an employer to offer maternity leave or take other steps to make it easier for pregnant women to work. Employers can treat pregnant women as badly as they treat similarly affected but nonpregnant employees."

What the relevant text of the law actually states is that a pregnant woman "shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work." In general, then, the law does not enact protections specifically for pregnant women as such; it only says that inability to perform job duties due to pregnancy should be treated the same way as inability to perform job duties for other reasons. If UPS doesn't have to keep employing someone who becomes unable to work because she injured herself on a non-work-related ski trip, for example, the company can and does argue, then they don't have to keep employing someone who becomes unable to work because her behavior outside of work led her to be pregnant.

Labeling pregnancy a disability under the Americans with Disabilities Act would have short-circuited this debate, for in that case it would be protected and employers would be required to accommodate it. Instead, well-intentioned lawmakers have left us with a law that does not designate pregnant women as a protected class, but says they are entitled to protection only if their physical limitations are similar to those of a non-pregnant person whom the company would accommodate. One can understand why this reasoning frustrates feminists: it is a short step away from saying that pregnant women are only entitled to protection insofar as a man's ability to work could be limited in a similar way--to be protected, you have to either be a man, or else be relevantly like some possible man. The people who are pregnant are women, so when our laws disproportionately affect pregnant people they disproportionately affect women, and that frustrates our notions of legal justice. On the other hand, one can also understand why this situation frustrates jurists: justice requires the even-handed application of general rules, and we make exception to a rule only when we can justify doing so by appeal to some other general rule which we have reason to believe should take precedence in a specific type of case. Formulating general rules to address these kinds of cases is, to say the least, tricky.

Because, as the Fourth Circuit noted, the law does not protect pregnant women per se, despite the noble title and evident goals of the Pregnancy Discrimination Act, Ms. Young is forced to make a narrower argument. She points to many cases in which UPS has offered accommodations to men in relevantly similar circumstances to hers--men who required accommodation due to events that happened to them outside of work, and for whom this requirement would be reasonable.

We should mention that Ms. Young's job almost never required her to lift more than 20 pounds to begin with. UPS could easily have simply provided the accommodations she requested, and indeed they have now changed their policy to do this in the future. The question for the Supreme Court is whether current law requires this.

In the meantime, perhaps we should find a way to put pregnancy under the umbrella of the ADA, or treat pregnant women as a protected class, while avoiding the offensive and silly implication that pregnancy itself is a disability. Surely we as a society have the brain power to accomplish this.

If you believe your employer has discriminated against you based on a pregnancy, please contact The Harman Firm, PC.

December 8, 2014

Summary Judgment Denied in FLSA Case SMITH V. SCHWAN'S HOME SERVICE, INC.; Court Finds Genuine Disputes on Both Administrative and Motor Carrier Exemptions

On November 25, 2014, the United States District Court for Maine denied summary judgment to food delivery giant Schwan's, accused of denying overtime pay in violation of applicable federal and state regulations.

Starting in June 2007, Mr. Smith held the position of "Facility Supervisor 1 HS" at the company's Gorham, Maine facility, where he was paid a salary of $38,250 per year. Schwan's treated Smith's position as exempt from the overtime requirements of both the Fair Labor Standards Act and Maine overtime statutes, and the case centers around the company's two arguments for Smith's exempt status.

First, Schwan's argued in its motion that its Facility Supervisors like Smith are covered by the Administrative Exemption. To evaluate whether the conditions for exemption had been met, the Court had to consider an array of factors, but in the end decided that the plaintiff could plausibly claim that his principal job duties were menial tasks such as "(1) pulling product from the freezers; (2) loading the delivery trucks with the product pulled from the freezers; (3) cleaning the depot; (4) fueling the trucks and otherwise checking the trucks to make sure they were ready to go in the morning; and (5) performing other manual tasks around the Gorham depot." In fact, the evidence from the case leading up to the Court's decision indicated that Smith spent only about 15 to 20% of his work time on exempt tasks. And while he was given responsibility for managing two Material Handlers, he also spent much of his time performing the same tasks as they did. In the end the Court found that "a genuine dispute of material fact exists as to whether the Administrative Exemption applies to Mr. Smith," so "Schwan's motion for summary judgment on this point must fail."

Second, Schwan's argued that Smith was exempt under the Motor Carrier Exemption (MCE). As amended in 2008, the MCE specifies that employees who "perform(s) duties on motor vehicles weighing 10,0000 pounds or less" are not exempt from overtime protections. The applicability of this exemption tends to be fairly clear in most cases, but the facts of this case make it interesting. It is uncontested that Mr. Smith very regularly drove his personal vehicle, a 7,000 pound pickup truck, in the course of doing his work. The Court noted that federal courts have generally taken "an inconsistent approach in answering the question of whether the MCE Exemption applies to an employee who drives both exempt and non-exempt vehicles," although the Department of Labor has explicitly addressed how the law applies in such cases and the guidance it has given tends to favor the plaintiff's position in this case. That is, the DOL's guidance on the subject states that employees who work on both heavy and light vehicles are entitled to overtime pay under the FLSA, unless their use of the light (less-than-10,000-pound) vehicles is de minimis. in this case, the Court concludes, it is not clear whether Mr. Smith's use of his personal vehicle was de minimis.

Thus, on both arguments regarding the plaintiff's exempt status, the Court found that there remained genuine issues of material fact to be decided in further proceedings.

If you believe you have been denied overtime pay in violation of state or federal law, please contact The Harman Firm, PC.

December 5, 2014

Maxim Healthcare Services Refused to Hire Qualified Applicant because He is HIV-Positive and Will Pay $75,000 to Settle EEOC Disability Discrimination Suit

In March 2014 the EEOC sued Maxim Healthcare Services, Inc. for discriminating against an HIV-positive individual in violation of the Americans with Disabilities Act. The company refused to hire the candidate because of his HIV-positive status. Maxim is a provider of medical staffing, home health, and wellness services and has more than 360 offices nationwide.

According to the lawsuit, the candidate had applied for a position that involved sitting with patients at a U.S. Department of Veterans Affairs medical facility. The candidate had already received an offer of the position from Maxim that was contingent on later completion of a health status certification. After receiving the candidate's medical information, which reflected his HIV-positive status but stated he was cleared to work, Maxim informed the candidate that he could not be hired because he was HIV-positive. Refusing to hire someone because of his HIV status violates the Americans with Disabilities Act.

"Once again, an employer involved in the health care field has impermissibly allowed fear and bias to enter into the hiring process," said Philadelphia Regional Attorney Debra M. Lawrence. "The ADA clearly prohibits covered employers, including those staffing health care positions, from refusing to hire someone based on disability."

Philadelphia District Director Spencer H. Lewis, Jr. added, "HIV status does not categorically preclude individuals from working in the health care field. Refusing to hire someone because he is living with HIV is not only shameful, it is a blatant violation of federal law."

On December 1, 2014, the United States District Court for the Western District of Pennsylvania entered judgment against Maxim Healthcare Services, Inc.. The court ordered Maxim to pay the victim of discrimination $75,000 in monetary relief and prohibited the company from engaging in disability discrimination or retaliation. The court also ordered Maxim to create and implement policies that explain, define and prohibit discrimination in the terms and conditions for employment. Further, the court ordered the defendant to implement mechanisms for the enforcement of such policies, including appropriate complaint and investigation procedures, as well as training and educating its employees on the subject of disability discrimination to prevent future violations.

If you believe you have been discriminated against in your work or in applying for a job based on your disability, please contact The Harman Firm, PC.

December 3, 2014

New Class Action Against Aerotek Staffing Agency for Violations of Fair Credit Reporting Act

On November 25, 2014, Plaintiff Michael Craig Mitchell filed a lawsuit, on behalf of himself and a potentially huge class of similarly-situated individuals, against employment agency Aerotek, Inc., an operating company of Allegis Group, Inc. In their complaint, plaintiffs allege that Aerotek routinely required prospective employees to authorize the company to acquire their "consumer reports," including information about criminal history. Plaintiffs allege that in some cases--probably many--the company took adverse employment action on the basis of the reports, without providing the required notice to the employees or allow them sufficient time to correct errors in their reports. The Fair Credit Reporting Act (FCRA) requires employers to provide a copy of any background report prior to taking any adverse action on the basis of that report, and to do so in time for the prospective employee to rectify any inaccuracies in the report.

In this case, Aerotek offered Mr. Mitchell a position at their client United Health Care, starting in early November 2012. Aerotek then requested his a consumer report on or around November 20, 2012 and On November 30 received a criminal background report for Mr. Mitchell. This report contained extensive personal information, including information about two felony and three misdemeanor convictions, all information about other people which was falsely attributed to Mitchell. That same day, an Aerotek representative informed Mitchell that he could no longer work at United health Care because of what they learned from his background report.

Finally, on December 7, 2012, Mitchell received mail correspondence from Aerotek titled "Notice of Intent to Take Adverse Action," along with a copy of the background report. This was the first time the report had been provided to him, which, if true, would be a clear violation of at least the following section of the FCRA:

(3) Conditions on use for adverse actions
(A) In general
Except as provided in subparagraph (B), in using a consumer report for
employment purposes, before taking any adverse action based in whole or in
part on the report, the person intending to take such adverse action shall
provide to the consumer to whom the report relates--

(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this
subchapter, as prescribed by the Bureau under section 1681g (c)(3)
[1] of this title.

Plaintiff Mitchell requests certification of the class of similarly situated individuals, statutory damages of between $100 and $1000 per violation of the FCRA, actual damages resulting from this and similar adverse employment actions, attorney's fees and costs, and whatever other relief the jury deems proper.

This is one of a growing number of similar large-scale FCRA class action lawsuits, several of which--including actions against Lowe's, Swift Transportation, and Whole Foods--we have recently described here.

If you believe an employer has unlawfully taken adverse action against you on the basis of a background check, please contact The Harman Firm, PC.

November 27, 2014

Arizona School District Settles with EEOC Over Violation of Age Discrimination in Employment Act

On November 17, 2014, the United States District Court for Arizona approved the settlement of Equal Employment Opportunity Commission v. Murphy School District No. 21, in which the Defendant agreed to pay $138,000 to twenty-three plaintiffs as compensation for denial of benefits based on recipients' age. More significantly, the school district agreed to re-write its policy quickly, undertake training programs, and subject itself to ongoing scrutiny and enforcement by the Commission.

The policy in question, as set out in the Complaint, on its face discriminates based on age, with younger retirees receiving substantially greater benefits than older in proportion to their age:

(a) Employees retiring with five through nine years of service:
Age Percentage
64 salary plus 3%
63 salary plus 6%
62 salary plus 9%
61 salary plus 12%
60 salary plus 15%
Less than 60 salary plus 15%

(b) Employees retiring with ten through twenty-four years of service:
Age Percentage
62 salary plus 2%
61 salary plus 3%
60 salary plus 6%
59 salary plus 11%
58 salary plus 16%
57 salary plus 21%
Less than 57 salary plus 21%

(c) Employees retiring with twenty-five or more years of service:
Age Percentage
60 salary plus 3%
59 salary plus 5%
58 salary plus 10%
57 salary plus 15%
56 salary plus 20%
55 salary plus 25%
Less than 60 salary plus 25%

The EEOC argued that this Early Retirement Incentive Program ("ERIP"), the explicit purpose of which was to encourage younger workers to retire, violated the Age Discrimination in Employment Act ("ADEA") by basing compensation on a retiree's age.

Policies like this one became unlawful in 1992, when the ADEA was amended by the Older Workers Benefit Protection Act ("OWBPA"), which explicitly outlawed retirement plans like the one above that discriminate based on age. With the OWBPA in place, organizations employing twenty or more people, including government entities, were prohibited from calculating retirement benefits based on an employee's age. As Congress stated in a 1990 Senate Report: "Early retirement incentive plans that deny or reduce benefits to older workers while continuing to make them available to younger workers may encourage premature departure from employment by older workers. This not only conflicts with the purpose of eliminating age discrimination in employee benefits; it also frustrates (rather than promotes) the employment of older persons."

Mary Jo O'Neill, Regional Attorney for the EEOC, points out the symbolic significance of this case for the many organizations that continue to have policies like the Defendant's: "Early retirement incentive plans which are facially discriminatory need to be changed. Discrimination on the basis of age is simply illegal. People in their 60's should not be penalized merely because they want to continue working. A retirement plan which states, for example, that employees 52 years old will receive a greater economic benefit than an employee 61 years old for retiring early is discriminatory on its face."

If you believe your employer has discriminated against you based on your age, please contact The Harman Firm, PC.

November 24, 2014

Record Judgment in Pregnancy Discrimination Case Against AutoZone - $185,000,000.00 in Punitive Damages

On November 17, 2014, the jury in Juarez v. AutoZone Stores, Inc. tacked on $185 million in punitive damages to its previous award of $872,719 for lost past earnings ($393,759.52), lost future earnings ($228,960), and emotional distress ($250,000). Lawrence A. Bohm of Bohm Law Group in Sacramento, California, who represented Ms. Juarez, said that the jury's award to his client was "the most ever awarded to a single employee."

In her complaint, plaintiff Rosario Juarez alleges that she had been abruptly promoted to the position of Store Manager after she had told her Human Resources regional manager that she was considering legal action because she believed that AutoZone consistently promoted far fewer women than men and paid them less than their male counterparts for the same work. The Defendant allegedly created a "glass ceiling" through an "opaque promotion process," intentionally and with malice according to the jury.

Then, in September 2005, Juarez became pregnant, at which time her manager's attitude toward her changed. He told her that she could not handle her job because she was pregnant, and that she should step down from her Store Manager position, which she refused to do. The same manager allegedly continued to harass her, telling her she should step down, that she could not be a mother and handle her job, and ultimately managed to get her demoted back to her previous Parts Sales Manager (PSM) position. She was told that she could be considered for a Store Manager position again after one year, but after one year actually passed they instead terminated her from her position as a PSM. Her termination The official reason for her termination was that she had been blamed for losing $400 in cash, but in the end the jury agreed with Ms. Juarez that her termination was due to gender discrimination and retaliation for filing this lawsuit.

AutoZone's legal and human resources departments failed to investigate Juarez's complaint about her manager's harassment, and even destroyed all the evidence of her comiplaint. The plaintiff argued, and the jury found, that this was consistent with the company's "division-wide effort to reduce the number of female managers." For example, Plaintiff alleges, AutoZone's Western Division Vice President of Operations once said "what are we running here, a boutique? Get rid of those women."

In addition to these allegations, the Juarez also successfully argued that she had lost substantial wages due to unpaid overtime. She claimed that the company knowingly maintained policies that had the effect of forcing managers to spend much of their time helping customers, which in turn required them to spend many off-the-clock, uncompensated hours keeping up with their managerial duties.

It is likely that the total amount of the award will end up getting reduced, but it should certainly send a message to the company about the jury's evaluation of its policies regarding pregnancy and gender discrimination.

If you believe you an employer has discriminated against you based on pregnancy or gender, please contact The Harman Firm, PC.

November 22, 2014

Accused of Misclassifying Strippers as Contractors, Rick's Cabaret On The Hook for $10.9 Million Before Trial Even Begins

On November 14, 2014, the District Court from the Southern District of New York granted partial summary judgment to more than 2,000 plaintiffs in Hart v. Rick's Cabaret International, Inc., awarding them a total of $10,866,035 but still leaving several "damages issues" to be resolved later at trial.

Plaintiffs in this case are exotic dancers who had been classified as independent contractors and never paid by the clubs where they worked, but only permitted to earn money directly from customers. The court had ruled on September 13, 2013 that these dancers should have been classified as employees, and thus entitled to at least minimum wage for all the hours they had worked. The court also found that the Clubs' duty under the FLSA to pay minimum wage was not discharged by the payment to the dancers, by customers, of "performance fees" for dances.

On the latter issue the court's rejection of Defendants' argument was thorough and decisive: "In asking the Court to recognize an offset to their NYLL minimum-wage obligations, defendants thus not only ask the Court to rewrite that statute to include an offset unsupported by the NYLL's text...The Court declines this invitation to legislate from the bench..." Continuing: "Defendants' notion that an offset against minimum wages ought be allowed here would...undermine key purposes of the NYLL," since "the Club has not kept records of these charges, paid taxes on them, included them on any wage statement or information returns (e.g. forms W-2 or 1099), or used them to calculate deductions for Social Security and Medicare. Under these circumstances, allowing such charges to offset an employer's statutory wage obligations would undermine these important programs and facilitate non-payment of taxes to federal and state authorities. It would also put employers like the Club at an undeserved advantage over competitors who pay workers lawfully by means of paychecks..." In short, the Court found multiple sufficient reasons not to allow the defendants to treat "service charges" as tips that could be counted against their minimum wage obligations.

The November 14th order includes five new decisions on pre-trial motions. The court ruled...

1. ....that, just as the dancers' payment by customers did not discharge the clubs' duty to pay them minimum wage under the FLSA, it also did not discharge the corresponding duty to pay minimum wage under the New York Labor Law;

2. ...that co-Defendant Peregrine is liable for retaining $2 in gratuities intended for the dancers for each $24 "Dance Dollar" that was purchased by a customer;

3. ...that the testimony of the plaintiffs' expert witness, Dr. David Crawford, would not be stricken;

4. ...that Defendants' motion to decertify the Rule 23(b)(3) class is denied; and

5. ...that the plaintiffs are entitled to some of the damages claimed in their complaint prior to trial. These damagers pertain to minimum wage under the FLSA and NYLL, unlawful retention of gratuities, and unlawful fines and fees.

Still to be decided at trial are three issues: first, whether plaintiffs are entitled to additional damages, beyond those awarded by the court at the summary judgment stage; second, the duration of these violations of the FLSA and NYLL, and whether they were willful and/or made other than in good faith, in which case a jury might tack on additional liquidated damages; and third, whether two other named defendants are joint employers that share liability.

If you are an employee and you believe your employer has violated your rights under the Fair Labor Standards Act or New York Labor Law, please contact The Harman Firm, PC.

November 19, 2014

Courts Seem Poised to Weaken NCAA's Limits on Compensation of College Athletes

As a lawyer or judge might put it, the perennial legal issue of whether college athletes can be paid is now ripe. To understand the current state of affairs with regard to the legal status of the NCAA's policies on payment of student-athletes, we must begin by reviewing some recent history.

On June 18, 2012, the Seventh Circuit Court of Appeals upheld a district court's grant of summary judgment to the defendant in the case Agnew et al. v. National Collegiate Athletic Association (NCAA). But this was one of those cases wherein the judge's reasoning was actually more important than the decision. The plaintiffs were football players who earned scholarships to play at NCAA Division I football programs, suffered career-ending injuries while playing, then did not have their scholarships renewed and were forced to pay their tuition out of pocket to complete their education. Their argument in the case was that, but for the NCAA's bylaws, which limit the number of scholarships schools can offer to athletes and prohibit schools from offering multi-year scholarships, these players would have been offered four- or five-year scholarships.

The question for the court in Agnew was whether the NCAA's policies violated the Sherman Antitrust Act. To show this, the plaintiffs would have to prove three elements: (1) a contract, combination, or conspiracy; (2) a resultant unreasonable restraint of trade in [a] relevant market; and (3) an accompanying injury. The circuit court determined that the first element had been provided, since "there is no question that all NCAA members schools have agreed to abide by the bylaws." It also did not deny that these athletes suffered substantial economic damages in having to either pay for the remainder of their education, after their scholarship support ended, or else absorb the cost of transferring to a new school. The decision came down to one issue, then: whether the plaintiffs had shown that the NCAA's policies "restrained trade in a relevant market."

In its motion for summary judgment, the defendant argued that the plaintiffs had failed to define precisely the market within which the alleged anti-competitive actions were supposedly taken. "...we believe," the court states, "it is incumbent on the plaintiff to describe the rough contours of the relevant commercial market in which anticompetitive effects may be felt. It must therefore be determined whether the actual markets allegedly identified in plaintiffs' complaint--the market for bachelor's degrees and the market for student-athlete labor--were actually identified...The district court held that plaintiffs failed to identify in their complaint either of the markets they now present, and we agree." In short, the plaintiffs made a strategic error by failing to include any definition of the relevant market in their complaint.

Interestingly, though, the court went on (seemingly) to offer advice to future plaintiffs pursuing similar claims. It explained that the notion of a market for bachelor's degrees would be problematic on several grounds. For example, strictly speaking it is not bachelor's degrees, but only educational instruction, that students purchase; also, the class of consumers of bachelor's degrees includes far more people than college athletes. But on the other hand, the court volunteered, "the market for student-athletes...would meet plaintiffs' burden of describing a cognizable market under the Sherman Act. As an initial matter, labor markets are cognizable under the Sherman Act." "Unfortunately for plaintiffs, nothing resembling a discussion of a relevant market for student-athlete labor can be found in the amended complaint. Indeed, the word labor is wholly absent."

The natural conclusion from the circuit court's discussion of Agnew is that another plaintiff or plaintiffs making essentially the same claims as the plaintiffs in this case, could prevail if they alleged that the NCAA was violating the Sherman Act by interfering with the market for student-athlete labor. And there is a current case that does exactly this: in Rock v. the National Collegiate Athletic Association, plaintiff John Rock asserts, on behalf of himself and a broadly-defined class of similarly situated individuals, that in its efforts to avoid paying student-athletes while channeling hundreds of millions of dollars to itself, the NCAA and its member institutions have "unlawfully agreed to artificially fix or reduce the amount of athletics-based scholarships to be awarded to class members in exchange for the student-athletes' labor by agreeing amongst themselves not to offer multiyear athletics-based scholarships and by agreeing among themselves to artificially limit the overall supply of athletics-based scholarships."

The plaintiffs in Rock followed the Seventh Circuit's advice almost to the letter, in the process quoting their ruling from Agnew at length, and seem to have made the case that the appeals court wished it had heard.

A ruling in favor of the plaintiffs in Rock would be, so to speak, a real game-changer. Perhaps it would become precedent for eventually allowing colleges to compete for student-athletes by (finally) offering to pay them for their work.

If you believe your rights have been violated by a current or recent employer, please contact The Harman Firm, PC.

November 17, 2014

Court Denies Summary Judgment To Defendant in Georgia Sexual Harassment Case

On November 10, 2014, Federal District Court Judge W. Louis Sands of the Middle District of Georgia denied summary judgment to the defendant in Turner v. Parker Security and Investigative Services, Inc. ("Parker"), finding that the plaintiff had introduced genuine disputes of material fact.

Parker employed plaintiff Latrecia Turner as a security guard at a Sourthern Ag Carriers, Inc. ("Southern Ag") facility in Blakely, Georgia from May, 2011 through January, 2012. On January 6, 2012, after her supervisor told Turner that she had violated company policy by using her cell phone at work, Turner informed her that she had used the cell phone to discourage Southern Ag drivers from sexually harassing her. That same day, Turner met with Parker District Manager Ricky Reynolds to discuss her complaints about continuous sexual harassment by Southern Ag workers, and Reynolds in turn discussed those complaints with the Director of Operations from Southern ag.

Southern Ag then informed Parker that Turner would not be allowed to return to work at their Blakely facility because the drivers had denied her allegations. On January 10, 2012, her supervisor informed Turner that she was being trasferred to a different Parker facility in Cuthbert, Georgia, about thirty miles away from Blakely. Turner rejected the new position because she did not have reliable transportation, and Parker then terminated her.

Noting that the Plaintiff's only claims pertained to retaliation rather than harassment, the Court decided to "...apply only Title VII retaliation law in analyizing Parker's Motion for Summary Judgment." Under Title VII, it is unlawful "for an employer to discriminate against any of his employees...because [that employee] opposed any practice made an unlawful employment practice [by Title VII]."

The court concluded that there was no genuine issue of material fact as to whether Turner engaged in protected activity. There was no dispute as to whether she had complained about sexual harassment to her supervisors, that she had used her cell phone in an attempt to avoid interacting with the drivers she complained about, or that she had reason to believe the behavior about which she complained was in fact harassment.

The court also resolved the question the whether the company had taken ad adverse employment action. Parker might have argued that Turner had reported on her application that she had access to reliable transportation, making her transfer to a different work site not burdensome enough to qualify as an "adverse" action. However, the court noted that transfer can be an adverse employment action, depending on the employee's circumstances. In this case, since Turner earned $7.40 per hour and could not afford a new means of transportation to the Cuthbert site, the court concluded that "Parker's making the transfer mandatory after learning that Turner did not have reliable transportation constituted a materially adverse employment action."

Finally, Parker claimed to have a legitimate, non-retaliatory reason for transferring Turner: to protect her from harassment by the Southern Ag drivers. But the court seemed skeptical about this claim, finding no support for it in the deposition testimony, and concluded that this would be (at best) a factual question for a jury to consider.

If you believe your employer has retaliated against you for complaining about sexual harassment or discrimination, please contact The Harman Firm, PC.

November 12, 2014

Minnesota District Court Rejects EEOC's Motion for Preliminary Injunction Against Honeywell's Employee Wellness Program

On November 6, 2014, the United States District Court from Minnesota issued a Memorandum Opinion and Order in the case Equal Employment Opportunity Commission v. Honeywell International Inc denying the EEOC's motion for an injunction blocking Honeywell from implementing its new employee wellness program. Honeywell's program requires employees and their family members to undergo biometric screening to use company-subsidized health savings accounts or, if they do not undergo such screening, pay several surcharges. The company claims that its policy carries out the intent of the Affordable Care Act ("ACA,") offering expanded access to health care for employees at reduced cost. But the Commission argues that these requirements violate both the Americans with Disabilities Act ("ADA") and the Genetic Information Nondiscrimination Act ("GINA"), by punishing employees who do not submit to a blood draw and screening for e.g. blood pressure, cholesterol, glucose, and nicotine levels.

The goal of Honeywell's voluntary wellness program is to reduce the cost of employees' health care by screening for medical problems and encouraging healthy lifestyle choices. The sticking point for the EEOC concerns penalties employees and their families would suffer if they choose not to take the biometric tests and participate in the program. For example, non-participants would lose up to $1500 in company contributions to their Health Savings Accounts, incur $500 surcharge added to their annual medical plan cost, as well as a $1000 'tobacco surcharge' for choosing not to be tested (whether or not they smoke). Employees who choose not to participate stand to lose up to $4000 through surcharges and lost HAS contributions, the EEOC concludes.

On its website, the company defends the program's inclusion of surcharges for non-participants: "we don't think it's fair to the employees who do work to lead healthier lifestyles to subsidize the healthcare premiums for those who do not." They argue that employees, in addition to promoting their health, would save about $125 on their health coverage by participating in the program, and that they have safeguards to keep employees' health information from being disclosed to the company.

So far the Court has only denied the Commission's motion for an injunction against Honeywell. But it also acknowledged both the gravity and novelty of this case, noting that "...great uncertainty persists in regard to how the ACA, ADA and other federal statutes such as GINA are intended to interact...As a general matter, EEOC enforcement actions are designed to be in the public interest. At the same time, Honeywell's wellness program--which aims to raise awareness of important health indicators among its employees without requiring specific behavior changes--appears to comply with the ACA's surcharge limits while also supporting one of the primary goals of healthcare reform: reducing overall health care costs."

The Court expressed some reservations about the EEOC's claim that Honeywell's program violates the law, but also acknowledged that this is an early stage of a potentially important and interesting case. "Should this matter proceed on the merits," Judge Montgomery concludes, "the Court will have the opportunity to consider both parties' arguments after the benefit of discovery in order to determine whether Honeywell's wellness program violates the ADA and/or GINA."

If you believe your rights under the Americans with Disabilities Act and the Genetic Information Nondisclosure Act have been violated by an employer, please contact The Harman Firm, PC.

November 11, 2014

Restaurant in Michigan Refused to Hire Pregnant Woman in Violation of Federal Law

On November 4, 2014 the EEOC filed a lawsuit against Crooked Creek & Creekside Bar & Grille (Crooked Creek) restaurant in Saginaw, Michigan, at the U.S. District Court, Eastern District of Michigan for violating federal law by refusing to hire a qualified applicant as a food server because she was pregnant.

According to the EEOC's lawsuit, the job seeker had prior experience working in a restaurant. She applied for a vacant food server position in February 2013. Her first interview with Crooked Creek went well and she was asked to return for a second interview. When the applicant revealed her pregnancy during the second interview, however, Crooked Creek refused to consider her further for the job. To refuse to consider a woman for a job because she is pregnant violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA).

The PDA amended Title VII to state that discrimination "because of sex" includes discrimination "on the basis of pregnancy, childbirth, or related medical conditions." Further, women affected by pregnancy, childbirth, or related medical conditions must be treated the same for all employment-related purposes. In addition to making it unlawful for an employer to refuse to hire a woman because she is pregnant, the PDA also means that if a pregnant woman is temporarily unable to perform the functions of her job due to a pregnancy-related condition, the employer must treat her in the same manner as any other temporarily disabled employee, by providing modified tasks, alternative assignments, disability leave, or leave without pay. Further, an employer may not fire, demote, or deny promotion to a woman because she is or may become pregnant.

New York's state and city law also provide protection against workplace discrimination because of pregnancy. While neither New York State Human Rights Law (NYSHRL) nor New York City Human Rights Law (NYCHRL) explicitly names pregnancy as a type of discrimination, courts have recognized that both laws provide the same type of protection as the PDA. For instance, the United States Court of Appeals for the Second Circuit in Quaratino v. Tiffany & Co. held that the NYSHRL provides the same protection conferred by the PDA and the standards for establishing unlawful discrimination under the NYSHRL are the same as those under Title VII cases.

A plaintiff claiming that she was unlawfully discharged because of her pregnancy in violation of federal and state laws must first show that (1) she is a member of a protected class; (2) she satisfactorily performed the duties required by the position; (3) she was discharged; and (4) her position remained open and was ultimately filled by a non-pregnant employee. Assuming the plaintiff satisfies the aforementioned requirements, the burden of production shifts to the employer to articulate a legitimate, clear, specific and non-discriminatory reason for discharging the employee. Lastly, if the defendant satisfies this burden of production, the plaintiff has the ultimate burden to prove that the employer's reason was merely a pretext for pregnancy discrimination.

Pregnant women have the right to participate in the labor market and employers may not force them out. Therefore, there are federal and state laws that give women the necessary protection against this type of discriminatory conduct.

If you believe that your employer has violated your rights because of your pregnancy, please contact The Harman Firm, PC.

November 10, 2014

District Court Rejects Motions by AT&T and Its Contractor to Compel Arbitration and Dismiss Complaint in Misclassification Case

On October 30, 2014, the Federal District Court from Eastern District of California rejected the basis of Defendant Carter Brothers Security Services, LLC's motion to compel arbitration, and effectively to dismiss the plaintiffs' complaint, in the case Gutierrez, et al. v. Carter Brothers Security Services, LLC, et al. Plaintiffs make many claims in their complaint that the defendant, including claims that the defendant...

...willfully misclassified employees as independent contractors,

...willfully failed to pay Plaintiffs and Class Members overtime and double time as required by law,
...willfully failed to provide mandated meal and rest periods,

...willfully failed to pay compensation due and owing in a prompt and timely manner upon termination, and

...willfully required plaintiffs as a precondition of employment to sign illegal, voidable, unenforceable and unconscionable "Independent Contractor Agreements."

These "Independent Contractor Agreements" included an arbitration agreement which, if ruled valid, would have required the Court to dismiss the plaintiffs' complaint and send the matter to arbitration. The Court declined to compel arbitration, based on an interesting process of analysis. First, whereas the relevant laws from Georgia, where Carter Brothers is headquartered, would support the defendants' motion, the Court found that the case belongs in California. But since Georgia's law "would...contravene fundamental California public policy ' in favor of ensuring worker protections'" regarding determination of a litigant's employee/independent contractor status, and since California has a far greater interest in the case, the Court ruled that California's law should be used. Thus, the Court concluded, in order to determine whether the arbitration provision was enforceable, it would first have to determine whether the contract was generally valid.

Plaintiffs had argued that the Agreement in question, which they had been required to sign as a condition of their employment, was "permeated with illegal and unconscionable terms," and were therefore not enforceable.

In the end, the Court agreed that the contracts were unconscionable. First, it found that these were "adhesion contracts"--that is, "standard-form contract(s), drafted by the party with superior bargaining power, which relegate(d) the other party to the option of either adhering to its terms without modification or rejecting the contract entirely." Further, the Ninth Circuit has held that "[a] finding of a contract of adhesion is essentially a finding of procedural unconscionability." Thus, the contracts were procedurally unconscionable. Second, the Court found that the contracts imposed one-sided burdens on employees, which made it impractical for them to use arbitration to vindicate their statutory rights. Thus, by both of the applicable legal criteria, the contract is unconscionable and thus unenforceable.

Further, the Court continued, the contract's "central purpose" was "tainted with illegality," since, as plaintiffs allege, the main purpose of getting employees to sign the contract was to allow the employer to avoid paying employment taxes and receive other benefits. Thus, "because the Agreements' underlying purpose appears to be illegal, the Court declines to enforce it."

Now the interesting questions will be: A) how many plaintiffs will join, and will the class be certified? b) Will AT&T and Carter Brothers be treated as joint employers, so both are liable: And c) will the parties settle. The question of whether the plaintiffs are independent contractors or employees seems all but decided.

If you believe you have been misclassified as an independent contractor by your employer, please contact The Harman Firm, PC.

November 7, 2014

Four States Vote to Increase Minimum Wage

After years of inaction by the U.S. congress, raising the minimum wage turns out to be a popular policy at the state level--even in heavily Republican states.

Arkansas increased its statewide minimum wage from $6.00 to $7.50 per hour starting January 1, 2015, then $8.00 starting January 1, 2014, then $8.50 starting January 1, 2016.

The minimum wage in Nebraska was raised from $7.25 to $8.00 per hour on January1, 2015, then to $9.00 on January 1, 2016.

Alaska's minimum wage will increase from $7.75 to $8.75 per hour on January 1, 2015, then $9.75 on January 1, 2016. It will then be adjusted upward for inflation each September for the following year, based on the Consumer Price Index for urban consumers from the Anchorage metropolitan area. In addition, employers may no longer credit tips or gratuities given to employees toward the required minimum wage, so that tipped employees will have to be paid the full minimum wage in addition to any tips or gratuities.

South Dakota raised its minimum wage from $7.25 to $8.50 per hour. They also tied minimum wage to increases in the cost of living, as measured by the Consumer Price Index. The hourly wage for tipped employees was also increased from $2.13 per hour to
fifty percent of the minimum wage as specified by the new law.

The voters of Illinois also passed a ballot initiative advising their state legislators to raise the state's minimum wage to $10.00 per hour. But this ballot measure is non-binding, and the same Illinois voters also elected a governor who became notorious for advocating a decrease in the state's minimum wage. So the likelihood of Illinois taking its citizens' advice seems low.

While it has been widely argued and reported that a rising minimum wage tends to cause companies to shed jobs to deal with rising labor costs, the research seems to contradict this narrative. States that have raised their minimum wage have tended to experience faster job growth than others that did not.