V&E Labor and Employment Law E-communication, July 12, 2010
The second quarter of 2010 is notable for several United States Supreme Court decisions involving disparate impact, employee benefits, arbitration, labor relations and privacy rights, as well as proposed legislative reform on employee classification and immigration, and the U.S. Department of Labor's new regulatory and enforcement strategy. Highlights of this quarterly update include the following:
Employment Discrimination
Disparate Impact: The U.S. Supreme Court held in Lewis v. City of Chicago that the 300-day statute of limitations period on a disparate impact claim begins to run when an employer uses a discriminatory practice even if the employer adopted the practice at an earlier time. In Lewis, plaintiffs challenged the application process the city of Chicago used to hire firefighters. Since plaintiffs filed their charge more than 300 days after Chicago adopted the application process, the lower court dismissed the suit as barred by the statute of limitations. The Supreme Court reversed, concluding that an employment practice is actionable when used, separate and apart from its adoption, and Chicago used its discriminatory practice each time it made a hiring decision.
New EEOC Chairwoman: Jacqueline Berrien, former Associate Director-Counsel of the NAACP Legal Defense and Educational Fund, became the new chairwoman of the U.S. Equal Employment Opportunity Commission. ERISA
Plan Administrator Entitled to Deference: The U.S. Supreme Court held in Conkright v. Frommert that a plan administrator’s interpretation is entitled to deference even if the administrator’s prior interpretation violated ERISA.
Attorney’s Fees for Partial Success: The U.S. Supreme Court held in Hardt v. Reliance Standard Life Insurance Co. that a district court may award fees under ERISA so long as the claimant achieved “some degree of success on the merits,” and reinstated a fee award to the plaintiff on her claim for long-term disability benefits where the administrator agreed to pay the benefits.
Employee Misclassification
Employee Misclassification Prevention Act (S. 3254, H.R. 5107 – Pending in Committee): The act would require employers to keep records of non-employees/contractors who perform labor or services for remuneration and provide notice to new employees and non-employees as to their employee or non-employee classification. The act would create a website to inform employees about wage and hour rights and provide protections to workers who face discrimination because they challenge their classification. The act imposes civil penalties of up to $1,100, or $5,000 for repeated or willful violations, for each misclassification or record-keeping/notice violation and doubles the amount of liquidated damages if misclassification occurred in conjunction with a maximum hour or minimum wage violation under the Fair Labor Standards Act.
Arbitration
No Class Arbitration Unless Agreed Upon: The U.S. Supreme Court held in Stolt-Neilsen SA v. AnimalFeeds International Corp. that imposing class arbitration on parties that have not agreed to class arbitration conflicts with the Federal Arbitration Act.
Arbitrator Decides Whether Agreement is Unconscionable: The U.S. Supreme Court held in Rent-a-Center West v. Jackson that, under the Federal Arbitration Act, when a party challenges the enforceability of the entire arbitration agreement, the question is resolved by the arbitrator. If the party challenges a specific provision allowing the arbitrator to determine the enforceability of the agreement, however, the issue is considered by the court.
Immigration
Real Enforcement with Practical Alternatives for Immigration Reform (REPAIR): Senate Democrats' draft proposal for immigration reform would require employers to verify the work status of new employees through new biometric Social Security cards, substantially increase monetary penalties for illegally hiring workers, and limit employers from hiring lower-skilled foreign workers to only those circumstances where American workers are unavailable.
Department of Labor
Enhanced Enforcement Strategy: The U.S. Department of Labor (DOL) outlined its new regulatory and enforcement strategy entitled, “Plan/Prevent/Protect": The Beginning of a Broader Regulatory and Enforcement Strategy. The strategy seeks to require employers to make efforts to uncover and correct violations before the DOL begins its investigation. Under this enhanced regulatory agenda, agencies at the DOL, such as the Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Office of Federal Contract Compliance Programs (OFCCP), and the Wage and Hour Division (WHD), will propose regulatory actions that require employers to develop programs to address certain employment law compliance issues.
Labor
Labor Board Cannot Act with Two Members: The U.S. Supreme Court held in New Process Steel LP v. NLRB that the National Labor Relations Board does not have authority to act with only two members. The normally five-member board must have at least three members to issue decisions. Over a 27-month period beginning on December 31, 2007, a two-member board decided nearly 600 decisions.
Two Board Members Confirmed: The U.S. Senate confirmed two outstanding appointees to the National Labor Relations Board — Bryan Hayes, a Republican labor coordinator for the Senate Committee on Health, Education, Labor and Pensions, and Mark Pearce, founder of a law firm representing unions — giving the board a full complement of members. The board is now composed of three Democrats and two Republicans.
Airline and Railway Unionization Made Easier: The National Mediation Board (NMB) reversed a 75-year-old rule and made it easier for airline and railway employees to unionize. Previously, an employee who did not cast a ballot counted as a "no" for unionization. Under the new rule, an employee who does not cast a ballot is not counted. The majority of employees actually casting ballots will determine whether the union becomes the exclusive bargaining representative. The Air Transport Association, an industry organization representing airlines in the U.S., filed suit in federal district court seeking to overturn the NMB’s decision, but the district court upheld NMB’s rule change.
Privacy Rights
Employee Text Messages: The U.S. Supreme Court held in City of Ontario, Calif. v. Jeff Quon that a text message search of a police officer's city-provided pager was lawful because, despite the officer's reasonable expectation of privacy, it was motivated by a legitimate work-related purpose and was not excessive in scope.
FMLA
FMLA Leave Expanded: The U.S. Department of Labor issued an Administrative Interpretation expanding the right to parental leave under the FMLA to employees who assume a child-caring role regardless of whether the employee has a legal or biological relationship to the child.
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