Significant changes in labor and employment law continued into the fall of 2009. These changes were the result of court rulings, new legislation, and government agency action, described below.

Labor
Successor Employers: The U.S. Court of Appeals for the Second Circuit affirmed a district court decision, Local 348-S, UFCW, AFL-CIO v. Meridian Management Corp., holding that a successor employer has an obligation to arbitrate whether, and to what extent, it is bound by the substantive terms of a predecessor’s collective bargaining agreement. Though Meridian does not bind all successor employers to the substantive terms of pre-existing agreements, it grants arbitrators the authority to determine the extent to which a successor employer will be bound by the substantive terms of a pre-existing agreement where there are sufficient indicia of "substantial continuity of identity of the workforce." That continuity may exist outside of a merger or sale of assets, as the defendant in Meridian had hired a subcontractor’s employees after the termination of a subcontract. Meridian creates a split with the Third Circuit, which has held that a successor employer cannot be bound by the substantive terms of its predecessor's collective bargaining agreement, absent consent.

Discrimination Laws
Protecting Older Workers Against Discrimination Act: (H.R. 3721; S. 1756 – Pending in Committee). This bill intends to reverse the Supreme Court’s 2009 decision, Gross v. FBL Financial Services, Inc. In Gross, the Supreme Court held that an employee bringing an age discrimination claim cannot establish liability by simply showing that age was a "motivating factor."  Rather, the employee must now show that age discrimination was the decisive factor. The bill codifies the pre-Gross burden of proof for mixed-motive age discrimination cases. That is, once the employee shows that discrimination was a motivating factor, the burden shifts to the employer to show that it would have taken the same action regardless.

Independent Contractors: The U.S. Court of Appeals for the Ninth Circuit held in Fleming v. Yuma Regional Medical Center that the federal Rehabilitation Act covers discrimination claims brought by independent contractors. This decision broadens the scope of the Rehabilitation Act beyond that of the Americans with Disabilities Act (ADA), which only applies to employees.

H1N1 Influenza
EEOC Guidance on H1N1 and ADA: An employer’s response to a potential H1N1 pandemic must be implemented in a manner consistent with the ADA. The Equal Employment Opportunity Commission (EEOC) has issued a document, “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act,” that provides guidance on potential ADA issues, including disability-related inquires, medical examinations, direct threat assessments, and the duty of reasonable accommodation.

Emergency Influenza Containment Act: (H.R. 3991 – Introduced in House Chamber). This emergency-temporary Act requires employers to provide an employee with up to five days of paid sick leave per 12 month period if, during that period, the employer directs the employee to leave work or not come to work because the employer believes the employee has symptoms of a contagious disease or has been in contact with a symptomatic individual.

Immigration
No-Match Rule: The U.S. Department of Homeland Security (DHS) rescinded its “no-match” rule, effective November 6, 2009. The rule would have provided safe harbor to employers who took timely steps after receiving a “no-match” letter from the Social Security Administration (SSA) or DHS. 

E-Verify: On November 19, 2009, Immigration and Customs Enforcement (ICE), U.S. Citizenship and Immigration Services (USCIS), and DHS announced its “I E-Verify” campaign to recognize businesses that use E-Verify, DHS’ online system to verify employment eligibility of new hires. On the same day, ICE announced that it would audit the hiring records of 1,000 employers in security and public safety sensitive industries to determine compliance with employment eligibility verification laws. On December 15, 2009, USCIS announced plans to add “self-checking” to E-Verify.  This tool will allow persons to check whether work authorization information they intend to provide to an employer matches the information available to employers on E-Verify.

The Comprehensive Immigration Reform for America’s Security and Prosperity Act of 2009 (CIR ASAP): (H.R. 4321 – Pending in Committee).  Among other things, this bill creates an employment verification system for new hires. This system would include significant civil penalties for employers who do not comply, serious criminal penalties for knowingly hiring unauthorized workers, and anti-discrimination provisions that forbid employers from using the new system to discriminate against applicants or employees.

Family and Medical Leave
FMLA Expanded: On October 28, 2009, President Obama signed into law the Fiscal Year 2010 National Defense Authorization Act (H.R. 2647), a section of which expands the Family Medical Leave Act (FMLA) military caregiver and exigency leave provisions. Qualifying exigency leave benefits are now available to family members of the regular armed forces deployed to a foreign country (not just family members of National Guard and Reservists). The military caregiver leave provision has been expanded to include care for veterans who are undergoing medical treatment, recuperation, or therapy for serious injury or illness that occurred any time during the five years preceding the date of treatment.  

Employee Classification
Underwriters Not Exempt: The Second Circuit reversed a lower court ruling, Davis v. J.P. Morgan, holding that loan underwriters did not regularly exercise discretion and independent judgment, as required by the Fair Labor Standards Act’s administrative exemption. 

The Taxpayer Responsibility, Accountability, and Consistency Act of 2009: (S. 2882; H.R. 3408 – Pending in Committee). This bill would amend the Internal Revenue Code to entitle persons classified as independent contractors to petition the Internal Revenue Service for a determination of whether they are properly classified. The bill significantly increases employer penalties and the likelihood of employment tax liability in the event of misclassification.

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