Category Archives: employment law

Gorsuch, Chevron and Workplace Law

Judge Gorsuch

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Employers and their attorneys are widely hailing President Trump’s nomination of 10th Circuit Court of Appeals Judge Neil Gorsuch to the U.S. Supreme Court. Part of the reason that management-side lawyers are praising Gorsuch is his position on Chevron deference. Gorsuch’s views on Chevron could affect how workplace laws are interpreted and how they apply to workers.

Chevron deference is a legal rule that a court will give the benefit of the doubt about the interpretation of the law to how the executive agency charged with enforcing that law understands the law. Gorsuch has criticized Chevron on separation of powers basis, stating that Chevron deference gives too much power to the executive branch at the expense of the legislative and judiciary branches. Recently, government agencies have been interpreting employment laws in a way that is more favorable toward employees. Recent rules issued by the Equal Employment Opportunity Commission regarding the Americans with Disabilities Act are a prime example.

Many workers who get hurt on the job are told that they must come back to work with no restrictions. Chevron deference could be a powerful legal tool for workers faced with such policies. The new EEOC regulations on the ADA outlaw 100-percent-healed policies or policies that require plaintiffs to return to work without restrictions. In the EEOC guidance on the issue, the EEOC cites Kaufman v. Peterson Health Care VII, LLC 769 F. 3d 958 (7th Cir. 2014) as an example of policies that they believe to be unlawful under ADAAA. This case represents a subtle but real shift from current 8th Circuit law as stated in Fjellestad v. Pizza Hut of America, 188 F. 3d 949, 951-952 (8th Cir. 1999) where the 8th Circuit joined other federal circuits that held that failure to engage in an interactive process in accommodating a disability was not per se discrimination, and that there was no duty to engage in the interactive process. The EEOC’s interpretations of the new regulations still require that a plaintiff be able to perform the essential functions of the job with or without reasonable accommodation.

But as indicated by Kaufman, courts may be less likely to dismiss cases before trial, or in legal terminology, to grant summary judgment, on the issue of whether a plaintiff could perform the essential functions of the job with or without accommodation if the defendant does not engage in an interactive process or summarily decides that an employee should not be allowed to return without restrictions.

The fact that there is a split between regional appellate courts, a so-called circuit split, over “100 percent healed” policies increases the chances that the U.S. Supreme Court will decide whether 100-percent-healed policies violate the ADA. Another issue where there is a circuit split that the U.S. Supreme Court will decide is the legality of mandatory arbitration clauses in employment agreements.

Many workers unwittingly give up their rights to have employment-law disputes heard in court when they agree to mandatory arbitration clauses as a term of employment. In D.R. Horton Inc., 357 N.L.B. No 184 (2012) the National Labor Relations Board ruled that mandatory arbitration clauses prohibited Fair Labor Standards Act collective action cases because they interfered with protected concerted activity under 29 U.S.C. §157 and 29 U.S.C. § 158. In Lewis v. Epic Systems, 823 F. 3d 1147, 1154 (7th Cir. 2016), the 7th Circuit struck down a mandatory arbitration clause partly based on giving Chevron deference to the NLRB’s decision in D.R. Horton. The 9th Circuit agreed with the 7th Circuit in Morris v. Ernst and Young, LLP, No 13-16599 (Aug. 22, 2016). Unfortunately for plaintiffs, the 8th Circuit disagreed with the D.R. Horton decision in Owen v. Bristol Care, 702 F. 3d 1050 (8th Cir. 2013).

If confirmed, Gorsuch would be unlikely to give much weight to the opinions of the EEOC or NLRB in interpreting employment laws. Chevron deference is an unpopular concept with pro-business conservatives. Recently, the GOP-controlled House of Representatives passed legislation that, if enacted, would abolish Chevron deference.

Conversely, Chevron deference is a popular concept with progressive employee and civil-rights advocates, as it allowed the Obama administration to expand employee protections in the face of a hostile Congress. But with the advent of the Trump administration and his immigration policies, progressives have a newfound appreciation for separation of powers.

Also, employee advocates probably will not like many of the new rules and regulations issued by Trump appointees such as Labor Secretary nominee Larry Puzder. A prospective abolition of Chevron could be helpful to challenging rules made by a Trump administration. An example from the last Republican administration is instructive. In 2007, the U.S. Supreme Court in Long Island Care at Home Ltd. v. Coke, 551 U.S. 158 (2007) gave Chevron deference to Bush administration rules to exclude home health aides from coverage under the FLSA. It was nine years later that the rule was overturned, giving Chevron deference to Obama administration rules regarding home health aides and the FLSA.

Are You Misclassifying Your Workers and Committing A Fraud?

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

To avoid misclassifying your workers follow these tips:

  • Don’t make assumptions. If you are a business owner you should consult a tax professional and an attorney to ensure you are complying with IRS and labor laws when hiring staff or contractors.
  • If contracting with staffing companies or labor brokers, make sure those agencies are properly classifying its workers as employees. Companies can be held responsible for labor violations of their contractors.
  • Consider filing a SS-8 Form (Determination of Worker Status) with the IRS and ask that agency to determine whether the worker is an employee or independent contractor.
  • Be aware that contractors set their own schedules and pricing, and perform the work as they see fit. If you want control over these areas, make sure you hire an employee.
  • Check the workers’ compensation policies of any subcontractor you hire. (Look out for “ghost policies,” which aren’t designed to cover known employees.)
  • Don’t rely on excuses such as “He only works a few days a week.” “She agreed to be an independent contractor.” “They use their own tools.” “He’s done this for so long he doesn’t need my supervision.”

Thanks to McClatchy DC!

 

“No Tengo Documentos”: Undocumented Workers’ Compensation

Representing injured workers in Wisconsin is a challenge; representing undocumented workers presents some additional obstacles. 

Many undocumented workers toil in extremely hazardous jobs resulting in injuries. While federal law clearly bars their employment, the real world practice of hiring undocumented workers is undeniable. The U. S. Immigration and Naturalization Services and the Immigration Reform and Control Act (IRCA) have made it illegal for employers to knowingly employ undocumented workers. 

Employers have attempted to use the IRCA as a defense to deny payment to injured workers by stating they would rehire the employee were it not illegal to do so. The Wisconsin Worker’s Compensation Act contains no provision for terminating disability compensation where an employee is terminated, so long as the employee is still temporarily disabled. The Commission has so indicated (see Arista-Reav Kenosha Beef, 1999 WL 370027, LIRC May 5, 1999).  The Commission has routinely rejected employer claims that undocumented workers occupy a different position under workers’ compensation because they are legally precluded from obtaining other employment until they resolve their immigration status.

Employers may still argue that certain benefits are not available given the circumstances of each case. For example, federal law requires valid citizenship to qualify for vocational rehabilitation benefits, so vocational rehabilitation (school retraining) would not be available to an illegal immigrant whose permanent restrictions cannot be accommodated by the employer due to illegal status. Denying an injured illegal immigrant Loss of Earning Capacity benefits on the notion that “but for” the illegal status, the employer could accommodate permanent restrictions is a trickier question. The Commission recently ruled in Zaldivar v. Hallmark Drywall, Claim No. 2014-WL-5350849 (Sept. 30, 2014) that an undocumented worker does in fact have a Loss of Earning Capacity and that one factor in determining that loss would be his illegal status.

Other states have wrestled with the same issue and come up with a similar result. In Iowa the Supreme Court held that an undocumented worker was indeed an employee potentially entitled to benefits. Staff Management v Jimenez, 839 N.W. 2d, 640 (Iowa 2013). The Iowa Court said the purpose of IRCA was to inhibit employment of undocumented workers, not to diminish labor protections (such as workers’ compensation) for undocumented workers. Tennessee held that an undocumented worker was an employee and had the same rights under workers’ compensation that all other employees had.  (See Torres v. Precision Ind, Inc. Tennessee Court of Appeals Aug 5, 2014). A similar result was reached in Wyoming (Herrera v. Phillips, 334 p. 3rd 1225 (Wyo. 2014), where, after an injury, the employer asked the worker: “You’re illegal, aren’t you?”.  The Pennsylvania Supreme Court reflects the rule in most states that an undocumented worker is an employee but once the employee recovers so that they can pursue some level of work, the disability benefits may be suspended.  Reinforced Earth v. W.C.A.B., 810A. 2d 1999 PA 2002.

Representing undocumented workers continues to pose challenges, but the courts have recognized their right to compensation for work injuries.

Retaliation / Refusal to Rehire in Worker’s Compensation

If an employer terminates an employee because of a work injury, or unreasonably refuses to rehire the employee after a compensable work injury, a penalty of up to one year’s lost wages applies. The purpose of Wisconsin’s statute is to prevent discrimination against employees who previously sustained injuries and if there are positions available within the injured employee’s restrictions, to assure the injured person goes back to work with his former employer.

This statutory protection is an exception to the general rule of “at will” employment in Wisconsin – where an employer can hire, fire, and make employment decisions for any reason or no reason at all, except for a discriminatory reason defined by law such as race, gender or religion. Under the Wisconsin Worker’s Compensation Law §102.35(3) a work injury is essentially an additional protected category. In a Refusal to Rehire case, the worker need not prove the reason for discharge in order to make a claim. In fact, the worker satisfies his burden of proof by showing he was an employee with a compensable injury who was subsequently denied rehire. Once established, the burden shifts to the employer to show reasonable cause for not rehiring the applicant. (Other States have similar provisions. See, for example, Ohio Code 4123.90 with similar anti-retaliation provisions.) The burden-shifting model recognizes the realities of the employment relationship and disparate access to information. The employee generally has limited means to prove the “real reason” for his discharge, so the burden is on the employer to establish good cause when the burden shifts.

Health Care Testing: A New Frontier for Worker’s Comp

As a worker’s compensation lawyer, I see many news stories through the prism of how the news event or trend will affect injured workers in the worker’s compensation system. A federal judge in Minnesota has ruled that Honeywell, Inc. can begin penalizing workers who refuse to take medical or biometric tests. 

The EEOC had claimed Honeywell’s policy violated the Americans With Disabilities Act and the Genetic Information Nondiscrimination Act. They filed a lawsuit in Minneapolis on behalf of two Minnesota employees of Honeywell.

The tests Honeywell required their employees to take measured blood pressure, cholesterol, and glucose, as well as signs that employee had been smoking. Employees who declined to take the test could be fined up to $4,000 in surcharges and increased health costs. Honeywell said the program is designed to “encourage employees to live healthier lifestyles and to lower health care costs.” Honeywell says the testing promotes employee well-being. Management also indicated “We don’t believe it’s fair to the employees who do work to lead healthier lifestyles to subsidize the healthcare premiums for those who do not.”

The ramifications of such testing for worker’s compensation immediately come to mind. In any kind of an occupational exposure claim, such tests could be used to help deny worker’s compensation claims for employees who smoke, are overweight, have diabetic condition, claims involving occupational back conditions, carpal tunnel claims, and any kind of respiratory complaints. Another “slippery slope” may be the use of these kinds of testing to actually screen prospective employees, since the employer rationale would be that hiring folks with those pre-existing conditions would cost the employer more money.

Are You Kidding Me? Jimmy John’s Makes Sandwich Makers Sign Non-Compete Agreements

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

I thought I was reading “The Onion” when I read that Jimmy John’s was forcing lowly paid sandwich makers in Illinois to sign non-compete agreements. Unfortunately, this is true, and that is tragic for Jimmy John’s employees and employees everywhere.

If there is a silver lining to this dark cloud for employees, it is that these agreements are generally not enforceable. My reading of Nebraska law leads me to believe that a non-compete agreement for a sandwich maker would not be enforceable. In Nebraska, non-compete agreements are only enforceable if 1) they are not injurious to the public and 2) protect some legitimate interest of the employer and 3) are not unduly harsh and oppressive upon the employee. Obviously these non-competes are unduly oppressive and harsh to employees, but they likely also do not protect a legitimate interest of Jimmy John’s. Employers can be protected from unfair, but not ordinary, competition. What unfair competitive advantage can an $8-per-hour sandwich maker give to another sandwich-making shop? Nebraska has struck down non-compete agreements for much more highly paid workers, like sales professionals whose livelihood depends on building relationships with customers. I cannot see how any court could equate a sandwich maker making the minimum wage with a highly-compensated software or farm-products salesperson.

But such legal reasoning is cold comfort for a low-wage worker who is stuck with one of these agreements. Such treatment of Jimmy John’s and fast-food workers in general explains efforts to unionize Jimmy John’s workers and other fast-food workers. If you are a food worker who receives one of these non-compete agreements, I would be happy to consult with you. I would also encourage you to visit jimmyjohsnworkers.org and/or fightfor15.org.

Also remember that an election is 12 days away in Nebraska, Iowa, and most of the rest of the country. Please get out and vote, and vote for candidates who support employee rights.

What Football Can Teach White-collar Employees About Layoffs, Severance

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

With football season upon us, I would like to use football to explain some common situations that employees face.

I get a lot of calls from white-collar professionals who have long careers with a company but then are laid off a few months after a new boss is hired. This happens a lot in football when a general manager/athletic director replaces a head coach and the head coach fires the previous coach’s assistant coaches. White-collar employees in middle-management positions are essentially the equivalents of assistant coaches in football. In the world of football, it is assumed that a new head coach can bring in his new assistants. The same assumption holds true in the business world.

Assistant coaches are oftentimes “bought out” of their employment contracts. Sometimes white-collar professionals have employment contracts, but more often than not they do not. Sometimes professionals are offered severance agreements, but unless there is an employment contract, that severance is not a buyout. Employers are also under no obligation to offer severance. If severance is offered, that doesn’t necessarily mean that an employer wrongfully terminated the employee.

Of course, no employee can be terminated because of age, disability, sex, race, nationality, or in retaliation for engaging in a protected activity like filing for workers’ compensation or filing with OSHA. But even if there is some appearance of wrongful motivation on behalf of the employer, the employer can still defeat a potential lawsuit if they have a legitimate business reason for terminating the employee. Going back to a football analogy, if the new head coach wants to switch an offensive or defensive scheme, they have the right to hire the person they choose. The fact the new hire might be less effective than the old hire is not a decision that a court will second guess in a wrongful termination. Sure, if there is something else wrongful going on, it is something a court or a jury could consider, but in a case where there is a recent change in management, employees will have difficult time overcoming the assumption that the new boss just wants to “put in their team.”