Judge Puts Brady Back in the Game

New England Patriots’ fans can thank U.S. District Judge Richard M. Berman if and when they see NFL quarterback Tom Brady suiting up next Thursday for the Patriots’ season opener.  Judge Berman vacated Brady’s four-game suspension for his alleged role in the 2015 AFC Championship Game’s Deflategate scandal. In July, NFL Commissioner Roger Goodell slapped Brady with the suspension pursuant to the League’s collectively bargained arbitration process.  Goodell concluded that Brady not only knew he was playing with non-regulation, deflated footballs, but that he also approved the tampering of the footballs and subsequently destroyed evidence of his participation in the incident.  Despite these findings, Judge Berman put Brady back in the game, lifting the suspension on the basis that the NFL deprived Brady of procedural due process during the arbitration proceedings.

Judicial review of arbitration awards is extraordinarily limited.  However, courts will reverse decisions where the employer violated fundamental requisites of “fairness” and “due process.”  Judge Berman’s 40-page opinion reads as a how-to manual for employers and arbitrators to ensure that the substance of the claims, rather than procedural technicalities, determines the outcome of the litigation. Continue Reading

Reminder for NYC Employers: Ban on Credit Checks Takes Effect Today

A new law restricting the pre-employment process takes effect in New York City today, September 3, 2015 (the Law).  As we previously reported, the Law bars most employers in NYC from requesting or considering, for employment purposes, a prospective or current employee’s “consumer credit history” – which means the creditworthiness, credit standing, credit capacity, or payment history of an individual (together, Credit) – as indicated by:

  • Such individual’s consumer credit report or credit score, or
  • Information an employer obtains directly from such individual regarding:
    • Details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, and prior credit report inquiries, or
    • Bankruptcies, judgments, or liens

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The National Living Wage – Will it cause a “catastrophic collapse”?

The National Living Wage comes into force in April 2016. This morning, the government announced it is doubling the penalties for minimum wage violators. In this blog, we take a closer look at how the National Living Wage (NLW) will work in practice.

What is it?

From April 2016, all workers aged 25 and over will be entitled to be paid £7.20 per hour (rising to £9 by 2020).

How will it work in practice?

Essentially it will create a new tier of National Minimum Wage (NMW) for those aged 25 and over. The NMW is currently £6.50 per hour for those aged 21 and over. The Low Pay Commission will decide how the NLW will reach £9 by 2020. Continue Reading

Employment Appeal Tribunal confirms temporary agency workers’ right to information about permanent vacancies is limited

In Coles –v– Ministry of Defence, the Employment Appeal Tribunal (“EAT”) has confirmed that agency workers’ rights to be provided with information about permanent vacancies within the organisation in which they work is just that; there is no right to be considered for the vacancy, whether on equal terms with permanent staff or otherwise.

The Facts

Mr Coles was supplied to the Defence Housing Executive (“DHE”), part of the Ministry of Defence, as a temporary agency worker. The DHE commenced a restructuring, with 530 permanent DHE employees placed in a redeployment pool. These employees had priority for any vacant roles in the DHE.

The DHE identified a ‘vacancy’ for a permanent employee to do Mr Coles’ role. The role was advertised internally. Mr Coles did not see the advertisement (albeit it would have been visible to him had he chosen to look for it) and so did not apply. One of the employees in the redeployment pool was successful in obtaining the role. Mr Coles’ contract was therefore brought to an end.

Mr Coles brought Tribunal proceedings alleging that the DHE had breached his rights under the Agency Worker Regulations by failing to give him the opportunity to apply for the role on an equal basis with employees directly employed by the DHE and, in particular, those in the redeployment pool.

The EAT’s Findings

The EAT held that the DHE had complied with its obligations. The DHE was simply required to provide information to Mr Coles about the permanent vacancy. The DHE had complied with this obligation by advertising the position in a place where Mr Coles could see it, in the same way as all other people working for the DHE could. The DHE was at liberty to place such conditions as it wished on recruitment for the role, including giving priority to those of its permanent employees who were at risk of redundancy. Mr Coles had no entitlement to be considered for the role on the same basis as a permanent employee.

Implications

On its face, this is, perhaps, a surprising decision, given that the objective of the Agency Worker Regulations is to protect temporary agency workers. However, notably, the Agency Worker Regulations limit equality of treatment between temporary agency workers and directly employed employees to certain specific areas, such as pay, and certain terms and conditions such as the right to annual leave. This is much narrower than the protection afforded to, for example, fixed-term employees compared with permanent employees. In fact, the EU Directive on which the Agency Worker Regulations are based contemplates that temporary agency workers will be treated differently, in certain respects, compared with permanent employees, given the common use of the former to plug temporary gaps in the workforce.

Pittsburgh City Council Passes Mandatory Paid Sick Time Law

Last week, the Pittsburgh City Council passed the Paid Sick Days Act (the Act), which Mayor Bill Peduto is projected to sign into law shortly. The Act is expected to become effective 90 days after the mayor signs it and the city has published all notices, regulations and other associated materials required by law.

Although the Act has yet to be enacted into law, it is anticipated that it will require all private Pittsburgh employers to provide certain paid sick leave benefits for employees, as follows:

  • Employers with 15 or more employees will be required to provide workers with up to 40 hours of paid sick time per year
  • Employers with fewer than 15 employees will be required to provide workers with up to 24 hours of sick time per year – time that may be unpaid for the first year following the Act’s effective date, but must be paid for all years thereafter

The Act is also expected to include various prohibitions against retaliation and discrimination against employees who take sick time, or who otherwise exercise their rights, under the Act, as well as new notice and record-keeping requirements for employers.

With this Act, Pittsburgh will join several other states and cities throughout the United States that have adopted similar laws mandating paid employee sick time benefits.

We will publish more complete information about this coming law, including what employers must do to prepare for compliance, once the Act is enacted. Should you have any questions about the Act before then, please contact one of the Labor & Employment attorneys in Reed Smith’s Pittsburgh office.

Dealing with Difficult Employees – Reed Smith to Present Seminar on Sept. 16

In nearly every business, regardless of size, difficult employees are among management’s biggest headaches. Drawing on real-life examples from workplace counseling and litigation, this presentation will address practical steps for dealing with difficult employees. The program will cover:

  • Hiring process
  •  Performance evaluations
  •  Disciplinary policies and procedures (union and non-union)
  •  Laying the groundwork for success before a judge, arbitrator, or agency

Presenters: John DiNome and Valerie Eifert

Date and Time: Wednesday, September 16, 2015 | 9:00 AM – 10:30 AM ET

Location:

Reed Smith
1717 Arch Street, 31st Floor
Philadelphia

Webinar
For those unable to attend the presentation in Philadelphia, the program will also be broadcast as a live webinar.

Registration: We invite employers to register to attend in our Philadelphia office or via webinar.

Holiday entitlement during sick leave – Where are we now?

An employee’s entitlement to holiday, and the pay he or she receives while taking holiday, has been a hot topic in the courts over the past few years.

In the case of Plumb v Duncan Print Group Ltd, the Employment Appeal Tribunal (“EAT”) has returned to the topic of an employee’s entitlement to holiday while on sick leave.

In 2009, the European Court of Justice (“ECJ”) in the cases of Stringer and Others v HM Revenue & Customs and Pereda v Madrid Movilidad established the following principles:

  • Workers who are off work on sick leave continue to accrue annual leave
  • Workers can take holiday during sick leave, however if they are unable or do not wish to do so, they can take it at a different time, even if this means carrying it over to the next holiday year

These decisions were all made under the EC Working Time Directive (“Directive”). However, they conflict with regulation 13(9) of the Working Time Regulations 1998 (“WTR”) which implements the Directive in the UK. Specifically, this provides that statutory annual leave must be taken in the same year in which it is accrued and cannot be carried over into the following leave year.

Continue Reading

Miss Any of the Major Wage & Hour Law News this Summer? We’ve Got You Covered

Developments in wage and hour law made major waves for employers this summer. They include: (1) proposed new overtime regulations from the U.S. Department of Labor (DOL); (2) an announced crackdown by the DOL on employers who engage independent contractors; (3) new federal court standards for assessing whether unpaid interns should be paid like traditional employees; and (4) a minimum wage hike for certain New York employees. For those who may have missed any of our prior reports this summer, here is a recap, with links to more in-depth analysis.

1. DOL Proposes Regulations that Dramatically Expand FLSA Overtime Eligibility

On June 30, the DOL released its highly anticipated proposed revisions to the Fair Labor Standards Act’s (FLSA) overtime exemption regulations, representing the first major proposed change to federal overtime law in more than a decade.

The DOL’s proposal would more than double the minimum salary an employee must earn to even be eligible for exemption from the FLSA’s overtime pay requirements – from just under $24,000/year ($455/week) to $50,440/year ($970/week). This new salary threshold corresponds to the 40th percentile of earnings for all full-time U.S. salaried workers. In addition, the proposed regulations would allow the DOL to automatically raise the salary threshold annually, without the need for any further, formal rulemaking procedures, thereby enabling the DOL to keep pace with 40th percentile statistics as they may change going forward. The only welcome surprise for employers in the DOL’s proposal is that it does not seek to modify the “duties” tests associated with the FLSA “white collar” overtime exemption categories, although some speculate that the DOL may roll out revamped “duties” tests at a later date.

Before the DOL’s proposed regulations become final, they are subject to a public comment period (open now) and finalization. Whatever iteration of the regulations ultimately is adopted, the final regulations are not likely to take effect before mid-2016.

Continue Reading

Indirect discrimination claim may be brought where Claimant does not have protected characteristic

In the case of CHEZ Razpredelenie Bulgaria, the European Court of Justice (“ECJ”) has extended the concept of indirect discrimination to cover those who do not have a protected characteristic, but who are associated with such people. In this case, a Bulgarian shop owner was protected from indirect discrimination affecting members of the Roma community, even though she was not a member of that community herself.

Facts

Ms Nikolova ran a shop in an area of Bulgaria which was predominately populated by members of the Roma community, but Ms Nikolova was not Roma herself. The local electricity company had a policy of fitting electricity meters 6 metres from the ground in the area of Ms Nikolova’s shop. This was because of the amount of tampering with the electricity supply in the area. Electricity meters would normally be placed much closer to the ground, allowing users to check their consumption.

Ms Nikolova complained that her electricity bills were high, but she was unable to check her consumption as her meter was so far from the ground. She suspected that the electricity company was artificially inflating her bill to make up for lost revenue as a result of the tampering with the electricity supply in the area. She raised a complaint with the Bulgarian Commission for Protection for Discrimination, arguing that she was being disadvantaged because of a practice applied on the basis that most of the inhabitants of the region in which she lived were Roma. The Commission upheld Ms Nikolova’s complaint. The electricity supplied appealed to the Bulgarian Administrative Court, which referred a number of questions to the ECJ.

The ECJ’s decision

The ECJ made a number of findings in connection with Ms Nikolova’s complaint. Of most significance was its finding in relation to indirect discrimination. The ECJ found that the EU’s directive on equal treatment relating to race and ethnic origin (“the Equal Treatment Directive”) did permit a person who did not have a protected characteristic to bring a claim of indirect discrimination, where that person was affected by less favourable treatment impacting those with a protected characteristic. In this case, Ms Nikolova could bring a claim of indirect discrimination because she was impacted by a practice which caused less favourable treatment/a particular disadvantage to a protected group (i.e., the Roma community in the area where Ms Nikolova had her shop), even though Ms Nikolova was not of Roma origin herself.

Significance

While this case was not about employment issues but, rather, the supply of services, the EU legislation on which the decision was based is the same. Notably, the provisions of the Equality Act on indirect discrimination are more restrictive than the provisions of the Race Directive, because they require a complainant to have a protected characteristic which, in this case, Ms Nikolova did not have. We can expect challenges to the Equality Act as not implementing properly the EU’s anti-discrimination directives in cases where individuals themselves do not have a protected characteristic, but are negatively impacted by those practices which cause a substantial disadvantage to those who do.

Stressed Out By Your Supervisor? Too Bad, Say California Courts

California employers may finally rejoice: there is now an employer-friendly state court decision, Higgins-Williams v. Sutter Med. Found., 237 Cal. App. 4th 78 (2015). The case takeaway is straightforward: an employee’s claimed inability to work under a supervisor because of the supervisor’s causing the employee anxiety and stress during standard oversight of the employee’s performance, does not entitle the employee to a viable claim for disability discrimination under the California Fair Employment and Housing Act (FEHA).

Case Summary

The case involved a clinical assistant who worked in a company’s shared services department. She provided the company with a report from her physician that indicated she was suffering from “adjustment disorder with anxiety,” which her physician described as a disabling stress condition caused by her interactions with her manager and company Human Resources (HR) representatives. In response, that company granted her a 30-day, stress-related leave of absence. But after she returned to work, she received her first negative performance evaluation. She also asserted experiencing additional conflicts with her manager, who allegedly was “curt and abrupt” to her during their interactions, gave her a disproportionate share of work, and, one day, yelled at her, causing her to suffer a panic attack and leave work, never to return. Instead, she submitted a disability accommodation request for a transfer to a different department (for “forever”) and an additional leave of absence. The company agreed to extend her leave several times, but it ultimately advised her that it would terminate her employment unless she provided information regarding (1) her anticipated return to work date, and (2) whether additional leave as an accommodation would effectuate her return to work. When she failed to supply this information, the company terminated her employment, and she filed suit.

Her suit alleged disability discrimination under FEHA, violation of the California Family Rights Act (CFRA), wrongful termination, and related claims. The Court of Appeal (Court) affirmed the lower court’s ruling for the employer on summary judgment, holding that the employee did not qualify as “disabled” for purposes of her FEHA or wrongful termination claims because “an employee’s inability to work under a particular supervisor because of anxiety and stress related to the supervisor’s standard oversight of the employee’s job performance does not constitute a mental disability under FEHA.” The Court noted that the outcome could be different if the supervisor was doing something other than “standard oversight of job performance,” but that there was no such evidence in the case. The Court further held that the employee’s CFRA claim was properly dismissed because her testimony—that she did not think she could have returned to work but was willing to try—failed to raise a genuine issue of material fact as to whether the company unlawfully failed to reinstate her following her leave.

Takeaway for California Employers

The Higgins-Williams case means that employers are not required to grant an employee’s request to transfer to a different supervisor as a disability accommodation, even if the employee submits medical documentation that working under a current supervisor causes him or her to be “stressed.” Of course, such situations still call for employer caution: all employee complaints about supervisor-induced stress should be documented and investigated to ensure that the supervisor has not engaged in misconduct beyond standard oversight of employee job performance. But absent any such misconduct, employers retain discretion over who supervises their employees.

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