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.

Just how wide is the band of reasonable responses for misconduct dismissals?

In Newbound v Thames Water Utilities Ltd, the Court of Appeal has restored an Employment Tribunal’s decision that the Claimant was unfairly dismissed for a breach of his employer’s health and safety procedures.

The case is a reminder that, although an employer’s decision to dismiss must only be within a band of reasonable responses to be fair, that band is limited. In particular, dismissals for misconduct are likely to be outside the band of reasonable responses where there is a disparity in treatment between employees and where the rules relied upon have not been sufficiently well publicised.

The facts of the case

Mr. Newbound had been employed in sewer maintenance by Thames Water for 34 years. In summer 2011, Mr. Newbound was assigned to an annual inspection of a sewer in East London. He discussed the work with his manager beforehand and it was agreed that the work would be conducted with the benefit of breathing apparatus feeding air from above ground. They then went through the safe system of work form, SHE4, which applies to more complex tasks. The SHE4 was a new document and stipulated that breathing apparatus must be used. Mr. Newbound was to work alongside Mr. King (a contractor) and Mr. Andrews, “the competent person in charge”, responsible for health, safety and entry.

Whilst on site, Mr. Newbound, Mr. King and Mr. Andrews discussed whether they in fact needed the breathing apparatus. Following a gas test, they took the view that they did not. This subsequently came to Mr. Newbound’s manager’s attention.

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Acas Early Conciliation – One Year On

In May 2014, in an attempt to simplify the Tribunal system and make it more efficient, the Government imposed a duty on claimants to attempt early conciliation through Acas before bringing a claim. A recent report provides information about the impact of Acas Early Conciliation in its first year.

The Early Conciliation Process

The Acas Early Conciliation process (“EC”) was introduced by the Government on 6 April 2014, and became mandatory from 6 May 2014. All prospective claimants in the Employment Tribunal must now go through the EC process and obtain an EC certificate from Acas before bringing a claim.

Once the prospective claimant contacts Acas, a Conciliation Officer will explore over the period of one month, whether settlement is possible between the parties. If a party is not interested in settlement, or if the Conciliation Offer considers that settlement is not possible, an EC certificate will be issued to the claimant. Neither party is obliged to conciliate.

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Prime Minister: Businesses with Turnover of £36 Million or More Must Publish Annual Statements on Slavery and Human Trafficking

This morning the Prime Minister made an important announcement regarding the new reporting requirement in the Modern Slavery Act. David Cameron confirmed that businesses with a turnover of £36 million or more will be caught by the Act and will therefore be required to produce an annual slavery and human trafficking statement from October 2015. The announcement was made as Mr Cameron travels to Vietnam where slavery and human trafficking is on the agenda.

The Government has chosen the lowest turnover threshold that was considered in the consultation stage, thereby affecting the largest number of businesses (estimated to be approximately 12,260). This approach is consistent with feedback received in the consultation.

Government guidance on compliance with the reporting requirement in the Modern Slavery Act is awaited. For further information on the reporting requirement please see our July 22 blog post, “The Modern Slavery Act: What You Need To Know.”

NY State Fast Food Workers Likely To Win $15 Minimum Wage Raise

As previously reported, Gov. Andrew Cuomo in May empaneled a three-person wage board (the Board) to study and fix perceived wage inequality suffered by New York’s fast food workers – including by recommending whether, and by how much, to raise their minimum wage. Cuomo’s actions were a direct response to state lawmakers’ snub of his latest attempt to raise the minimum wage statewide (it is already slated to increase to $9/hour in 2016, but Cuomo had tried to raise it to $10.50/hour).

During several meetings held throughout the state earlier this summer, the Board heard extensive – mostly one-sided – testimony on the appropriate wage rate for fast food workers. The Board also expressed concern during the meetings about these workers’ unpredictable schedules, and it considered whether to set the pay rate for part-time workers higher than that for full-time workers, so as to incentivize employers to create more full-time jobs.

The Board’s Proposals

Finally, on July 22, the Board revealed its formal proposals, which the New York State Department of Labor (NYSDOL) is expected to adopt without hesitation.

From the business community’s standpoint, the only positive feature in the Board’s proposals is the absence of any recommendation regarding employee scheduling or distinct pay rates for part-time workers.

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Trade Union Bill Published

On 15 July 2015, the Government published a draft Trade Union Bill which sets out changes to tighten the law on industrial action.

What is the current position?

There is no general right to take industrial action under UK law. In most cases, employees taking industrial action will be acting unlawfully since by doing so, they will be acting in breach of their contracts of employment. A trade union calling for industrial action will therefore be inducing such breaches.

However, under current legislation, provided statutory conditions are met, employers are unable to sue trade unions for inducement and certain other torts, or to dismiss employees fairly for taking industrial action.

Much of the legislation regulating industrial action was introduced in the 1980s by the then -Conservative Government. The current provisions are now contained in the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). These provisions are complex.

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New Amendment to California Sick-Leave Law Takes Effect

On July 13, 2015, Governor Brown signed Assembly Bill 304 – an amendment to California’s recently effective (as of July 1, 2015), statewide sick-leave law, known as the California Healthy Workplaces, Healthy Families Act of 2014 (the Act). The Amendment is effective immediately. It adds significant new compliance options for employers, in addition to clarifying various ambiguities in the original Act. Below, we highlight the Amendment’s most important changes for employers.

Additional Accrual Options

The Amendment adds a third sick-leave accrual option for all employers: employers may accrue an employee’s sick-leave entitlement on a regular basis as long as it results in the employee earning at least 24 hours of sick leave by his or her 120th day of employment (or other 12-month accrual period).

  • Before the Amendment, employers were only permitted to accrue employee sick leave either (1) at an hourly rate (one hour for every 30 hours worked), or (2) granting a full 24 hours all at once at the start of the 12-month accrual period (i.e., frontloading)

Although the two pre-Amendment accrual options are still available to employers, the new, third option obviates employers’ need to tie sick-leave accrual to hours worked; sick leave can instead be tied to pay periods or other easy-to-measure benchmarks. The new accrual option will be particularly helpful for employers that wish to combine sick-leave policies with new Paid Time Off (PTO) policies, as most employers do not have PTO accrue on an hourly basis. For employers that had PTO policies in effect before January 1, 2015, the Amendment also allows for a fourth accrual option: such employers may continue existing PTO accrual methods as long as: (1) the accrual occurs on a regular basis; (2) the accrual results in each employee earning no less than one day (or eight hours) of sick leave or PTO within each three-month period of employment; and (3) employees are eligible to earn at least three days (or 24 hours) of sick leave or PTO within each nine-month period of employment. Note, however, that if an employer changes its accrual method under a pre-existing PTO policy (other than changes that merely increase the employee’s accrual amount or rate), it must then use one of the other accrual options going forward.

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The Modern Slavery Act: What You Need To Know

The Modern Slavery Act was passed in March 2015. When section 54 of the Act comes into force, large businesses will be required to report annually on their efforts to ensure the business and its supply chains are free of slavery and human trafficking. Below, we consider what businesses need to do to comply.

The obligation

Section 54 of the Act requires businesses over a certain size to publish an annual slavery and human trafficking statement. The statement must confirm either:

  1. the steps the organisation has taken to ensure that slavery and human trafficking are not taking place in any of its supply chains or in any part of its own business; or
  2. that no such steps have been taken.

A link to the statement must be published in a prominent position on the business’ website homepage and the statement must be approved and signed by a director. So, although businesses could opt to take no action as a result of the Act and simply produce a statement under option (b), the Government hopes that public pressure and scrutiny from shareholders and the media, together with the risk of reputational damage, will encourage businesses to take real steps to investigate their supply chains and publish details of their efforts. Experience in California, with similar legislation, suggests businesses will not go for option (b).

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The legality of employee strike action

Welcome to Reed Smith’s Monthly Global Employment Law blog post. This month’s post covers the legality of employee strikes in five key jurisdictions: France, Germany, Hong Kong, the UK and the United States.

France

According to the French Supreme Court, a lawful strike action is defined as a collective cessation of work, the purpose of which is to support professional claims. In the private sector, the right to strike, as a constitutional right, cannot be restricted or regulated by a collective agreement or by the employer itself. There is thus no obligation to comply with a specific notice period prior to going on strike. Employees, however, must inform the employer of their claims at the time they decide to stop working and go on strike.

Employment contracts are suspended during the strike (i.e., the employees do not perform their duties and the employer does not pay them). Employees on strike are protected against any disciplinary sanctions, including dismissals in the sense that any sanctions that may be imposed where there is lawful strike action are deemed to be null and void. This protection does not apply when the strike is unlawful (i.e., the action does not support professional claims or where the employees on strike prevent non-strikers from working).

The majority of strike actions are usually settled without having to commence legal action before the courts.

Germany

In Germany, a strike is the typical industrial action on the part of the employees and trade unions. To be legal, a strike must meet certain formal requirements and pursue a legitimate purpose. Formally, a strike must be (i) organised by a trade union; and (ii) called following a strike vote conducted according to democratic principles. Therefore, a so-called “wildcat” strike, which is not organised by a trade union, is illegal. Any strike must pursue a legal purpose, which can only be to change working conditions. Furthermore, a strike must be conducted in a reasonable and lawful manner. Therefore, the union may not occupy the premises, call on customers of the employer to boycott the product, or prevent employees willing to work from entering the premises and working.

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Closing the Gender Pay Gap

This week the Government confirmed it will issue regulations requiring employers who have 250 or more employees to publish gender pay information. This blog explores the impact for employers.

The Government has now confirmed its intention to legislate under section 78 of the Equality Act 2010 which gives the Government power to issue regulations requiring employers who have 250 or more employees to publish gender pay information. On 14 July 2015, the Government published a consultation paper on the details of the regulations to be made under this section (‘Closing the Gender Pay Gap’).

The consultation paper indicates that the new regulations will require larger private and voluntary sector employers in Great Britain with at least 250 employees to publish information about the difference in pay between male and female employees. For the purpose of these regulations, a person will be an ‘employee’ if they are employed under a contract of employment, a contract of apprenticeship or a contract personally to do work.

The paper asks for views on what the new regulations should look like and how they should operate. Specifically, some of the noteworthy questions that have been raised in the paper are as follows:

  • What level of detail of gender pay gap information should be required from employers. Should a general overall figure be provided (the overall difference between the average earnings of men and women as a percentage of men’s earnings), or should the gender pay gap figure be broken down by grade or job type, or by full-time and part-time employees;
  • Whether the regulations should specify where the employer must publish its pay information, for example, in a prominent place on its public website
  • Should the gender pay gap figures be accompanied by contextual narrative, explaining any pay gaps and setting out what remedial action the employer intends to take. The paper also asks whether the provision of this narrative should be set out in the regulations or whether the provision of additional information should be voluntary
  • How often employers should be required to publish gender pay gap information. Under section 78 of the Equality Act 2010, the most frequently that employers can be required to publish this information is annually. However, the paper also suggests this could be biennially or triennially
  • The paper also asks for commentary on what help the Government can provide to support employers. Suggestions for such help include providing access to software that will help employers calculate their organisation’s gender pay gap, or helping employers with the analysis of figures.

The consultation on the proposals for the regulations closes on 6 September 2015.

Practical Points for Employers

The consultation paper gives employers a window into how the regulations may look.

The paper confirms that qualifying employers will need to publish information on their gender pay gap. However, the information employers are required to provide could be more than just the provision of a single figure. Employers may need to provide information of a level of granularity over and above an overall general pay gap figure. Employers may also need to provide accompanying information contextualising the figures. If this is the case, it could increase the cost and time commitment for employers.

Additionally, employers may be required to report these figures annually and in a very public manner. Depending on the figures, publication on the employer’s public website in a prominent place may leave employers open to criticism and claims, and therefore employers should consider that action may need to be taken to mitigate any negative publicity, or the risk of claims.

However, although the regulations will require publication of pay information, following this publication, it does not look as if there will be a positive obligation on employers to take action to rectify any issues. Rather, the Government anticipates that the “comparative” factor will encourage employers to tackle any gender pay gap issues.

Although employers should be reassured that these regulations do not require businesses to undertake a detailed pay audit. As we have previously reported, such an audit would require employers to undertake a company-wide audit to assess where men and women are doing similar work or work of similar value, and close any pay gap between them. The requirement to undertake an audit would be far more burdensome and would create larger administrative costs for employers.

What Can Employers Do Now?

Employers should start to seriously consider equal pay issues, as it is anticipated that the regulations will be laid down in the beginning of 2016. Although this seems soon, the Government proposes that commencement of the regulations is delayed to give businesses an opportunity to prepare for implementation.

Therefore, it may be useful for employers to consider how an assessment of gender pay information could be undertaken and whether this should be done in advance of the publication requirements in order that any issues can be addressed in private. It may be better to remedy any issues now rather than wait and take action when shamed by the requirements of the new regulations.

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