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Introducing "Laboring On"
At Kotz Sangster one of our highest priorities is keeping our clients apprised of the legal developments which may affect them or their business. As part of this ongoing process we are pleased to announce our Labor & Employment group's quarterly newsletter, Laboring On.
The labor and employment attorneys at Kotz Sangster are experienced in the full breadth of issues employers face. We represent our clients in disputes with unions, lawsuits by individual employees, non-competition and trade secret litigation, wage and hour issues, and on and on it goes. We know that employers who are informed about the legal landscape and are proactive in dealing with their employees can reduce the risk they face from legal battles involving labor and employment issues. This newsletter is one way that we hope to keep you informed and help you to be proactive.
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 | | Heather Ptasznik |
Meow! Employer's Liability Expanded
In Staub v Proctor Hospital,the Supreme Court unanimously held that an employer can be held liable for employment discrimination claims based on the bias of a supervisor who influenced, but did not make the final employment decision. This is often called "cat's paw" liability, which means the adverse employment decision made by a "clean" upper-level executive may have been "infected" by a lower-level supervisor who had discriminatory animus.
Staub involved a worker who was fired after prolonged disputes with his supervisors, who objected to his absences for Army Reserve duty. He alleged that he was subjected to special work rules, as a part of a campaign to get rid of him, and wrote a false reported that he had violated the rules. The employee argued that his immediate supervisors' anti-military bias was a motivating factor in an unbiased supervisor's final decision to fire him.
The Court outlined three factors that must be shown before cat's paw liability attaches: (1) the supervisor takes a step that is done for a biased reason, (2) that supervisor intends to cause the worker some adverse employment consequence; and (3) the supervisor's step is found to be the proximate cause of the ultimate decision, even if the person responsible for making the ultimate decision was not at all biased.
As a result of the Court's ruling in Staub, employers should make sure that a meaningful review of employment decisions becomes a regular part of their progressive disciplinary process. Employers should analyze why they are taking the action? What led to that decision? Who provided input into it? Did Human Resources conduct an independent investigation? While the case is applied in the context of USERRA (discrimination against some service members), the language is similar to Title VII and FMLA. Employers, therefore, should expect such logic to be applied to those cases too. These potential far-reaching consequences are why some bloggers are calling Staub the most important decision made by the Court this term. |
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Disabled or not? New ADA Regulations Have Arrived
 | | Linda Ryan |
Nearly two years after the Americans with Disabilities Amendments Act ("Act") was signed into law, and 18 months after its effective date, the EEOC has published the Final Regulations implementing it. The regulations became effective may 24, 2011. This article highlights only a few of the important changes. Key changes in the regulations include:
Principles for determination of a disability. Previously, much litigation centered on whether an employee was actually disabled. Under the new regulations, that changed. There are now nine "rules of construction" which will be used to determined whether someone is "substantially limited" in a "major life activity". The EEOC directs that these terms must be construed broadly to the maximum extent permitted under the Act. Importantly, except for eyeglasses or contact lenses, "mitigating measures" like medication and assistive devices cannot be considered when determining whether an impairment substantially limits a major life activity.
Major life activities. The final regulations provide a "non-exhaustive" list of examples of major life activities. Additionally, the regulations clarify that a major life activity includes "major bodily functions", such as immune system, neurological functions and respiratory functions.
"Regarded as" element. The Act expands the "regarded as" protection by prohibiting discrimination based on an individual's impairment or an employer's perception of impairment. The focus is on how the individual was treated rather than on what the employer believes about the impairment.
The practical implications of this expansion of the Act means that many more employees will qualify for the Act's protections. Going forward, employers will need to focus more on accommodation and less on whether a person is considered disabled. Employers should conduct individualized assessments of requested accommodations, and that process should be clearly documented. Court decisions will likely hinge on whether employers took the right steps to individually assess an employee's or applicant's ability to perform essential job functions, and whether reasonable accommodations could have overcome any limitations. Employers are strongly encouraged to consult with counsel to ensure their policies and practices remain in line with the new regulations. Employers should pay particular attention to reasonable accommodation policies and procedures and to train management about the wider range of conditions and circumstances that trigger rights and responsibilities under the Act. |
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Retaliation Claims---Now Even Easier to Make
 | | Matthew Derby |
Retaliation claims against employers have risen right along with the unemployment rate. In January, the United States Supreme Court held that "third party victims" can claim retaliation (Thompson v North American Stainless LP, discussed in April's edition of "Laboring On"). Now, in Kasten v Saint-Gobain Performance Plastics, Corp. the Court has held that "filing" a complaint under the Fair Labor Standards Act extends to oral complaints. This case has significant implications for employers for two reasons: (1) in this particular case, the employee never made any complaint in any form outside the company to any governmental agency; and (2) the complaints the employee did make were verbal remarks only.
The employer unsuccessfully argued that requiring a written complaint ensured that employers are given fair notice about whether an employee is truly making a complaint or simply venting. While the Court agreed that some formality is required, it held that an oral complaint would meet this requirement when "a reasonable, objective person would have understood the employee to have put the employer on notice that the employee is asserting statutory rights under the Act." It reasoned that to rule otherwise would prevent "the Government from using hotlines, interviews, and other oral methods of receiving complaints."
The Court did not rule on the separate issue of the employee's failure to make a complaint to a governmental agency because the employer failed to raise that issue. As a result, employers must wait for lower courts decisions which will provide guidance going forward.
With this most recent Court decision, which expands the reach of the anti-retaliation provisions of the FLSA, it is becoming apparent that it is imperative for management, especially front-line supervisors, to be aware of and to be trained to handle complaints when they arise in the workplace. Improperly managing such a complaint or dismissing it as "venting" may prove to be costly.
Employers in Michigan are subject to the Michigan Wages and Fringe Benefits Act as well. This act also includes an anti-retaliation provision for those filing a complaint. Michigan law currently provides that "filing" is to be in writing. |
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Attorney Heather Ptasznik will be presenting at the Sterling Education Employment Law Update: Contemporary Challenges in a Changing Workplace seminar in Lansing, scheduled for Thursday, August 18, 2011. Ms. Ptasznik will be presenting two topics:
- ADA/FMLA/State Law Overview, Update, and Overlaps
- Sexual, Racial, and other Harassment and Discrimination
Ms. Ptasznik is a frequent speaker on employment law topics. For information about registering, please contact Ms. Ptasznik's assistant, Leslie, at 313.259.8300 or llaverdiere@kotzsangster.com
The Grand Rapids Offices of Kotz Sangster will be hosting an open house on June 23, 2011 from 5:00-7:00 p.m. Food and beverages will be provided. For details, please contact MaryElizabeth Bunt at 616.940.0236 or mbunt@kotzsangster.com |
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Election Victory Snatched Away Due to Poorly Written Policies
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 | | Timothy Ryan |
Recently, the National Labor Relations Board ("NLRB") set aside the results
of a decertification election to vote out a union which the employer won by a single vote. Jurys Boston Hotel. The NLRB held an employee handbook distributed two years prior to the election contained three policies: solicitation, emblem wearing and loitering that the NLRB ruled were overbroad, and therefore, unlawful.
This decision is notable for several reasons. First, there was no showing that the employer ever enforced the rules against "protected activity." Second, the policies were in place long before the decertification process began. Third, during the previous two years (and while the employees were represented by the union) the union never objected to the policies. Fourth, no new employees were hired or even given the handbook during those two years. Finally, the evidence suggested that employees violated these rules without consequence.
In sum, what likely happened is that following the election results, the union scoured the employer's documents for any reason to challenge its ouster. It seized upon these policies as that opportunity. The NLRB held that merely maintaining these policies was sufficient to set aside the election results and order a new election.
This decision drives home the importance of having lawful handbook policies in place, and the importance of regularly reviewing and revising (when necessary) existing handbook policies. An employer's failure to carefully draft its policies in this instance not only resulted in a violation of the National Labor Relations Act, but also in overturning the results of an election which the employer won. |
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Bullet-Proof Those Non-Solicitation and Non-Competition Agreements
 | | John Below |
Recently, there has been an increase in litigation seeking to non-solicitation and non-competition agreements. Sucess in these matters depends upon how well the agreement was drafted. Employers must avoid these common, and sometimes, fatal errors:
One Size Does Not Fit All. Many employers simply require each employee to sign the exact same document, without giving any thought as to the individual employee's position, exposure to confidential information, trade secrets or interaction with customers. To be enforceable, the restrictions must have a significant connection to the individual's employment situation and be necessary to protect the legitimate rights of the employer. Thus, using the same restrictive language for support staff as you would the top salesperson in your company may well render the agreement unenforceable.
Define "Solicitation". The term "solicitation" is often used in this context, "Employee is forbidden from solicitation, indirect or direct...." Unfortunately, "solicitation" can have different meanings in different courts ranging from mere contact to requiring an overt, affirmative action to obtain the business/relationship. Think about what conduct and activities you want to prevent. Then specifically define what "solicitation" means in your agreement. In today's world, a carefully drafted agreement will also include prohibitions against using social media formats to solicit.
Properly Protect Confidential Information. Along the same lines as above, define what your business deems to be "confidential information". Once you have defined what you wish to protect as "confidential information", you must think about what protection you are trying to achieve. One common mistake is to solely limit "disclosure of confidential information." Under the terms of such an agreement, the former employee can continue to use that information, so long as he or she does not share it with another person or entity.
Watch Your Language. Many employers place non-competition/non-solicitation agreements within the same document as an employment agreement. The employment agreement may also contain a typical at-will provision permitting either party to end the relationship at any time. Unless your agreement also contains language stating that the non-competition aspect of the agreement survive separation, you may well be defenseless when the former employee begins working for a competitor. Remember, the document is read as a whole, and you must make certain that the provisions, when read together, have the intended result.
"Reasonableness" is Key. Bigger is not better. Restraints must be reasonable in light of the legitimate protectable business interests. If you seek to enforce an overbroad agreement against an employee (e.g., an agreement preventing the individual from working anywhere in the United States in a particular field), you risk having the entire agreement thrown out. The length of time and geographic area restrictions should be no greater than is reasonably necessary to protect your business interests.
Injunctive Relief. One of the key results desired by this type of agreement is the ability to stop a former employee from competing with your business or soliciting your clients. As a result, it is important to include a provision specifically stating that you are entitled to injunctive relief in the event of a violation.
Who pays? Consider an indemnity clause which provides that if you must litigate the agreement due to the employee's violations, the employee is obligated to pay your reasonable litigation costs, including attorneys' fees.
When drafting these agreements, keep in mind that they are historically disfavored by Michigan courts, which often look for reasons to hold them unenforceable. As a result, take care to deliberately and meticulously craft the agreements, individually tailoring them for the individuals and positions involved. Reevaluate the agreements reuglarly, and consider implementing a new agreement if an individual's position has changed within the organization. As always, your Kotz Sangster labor and employment attorney is available to assist you in these matters. |
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Kotz Sangster
Labor & Employment Attorneys |
John Below
313.259.8597
jbelow@kotzsangster.com
Matthew Derby
313.259.8653
mderby@kotzsangster.com
Heather Ptasznik
313.259.8586
hptasnik@kotzsangster.com
Linda Ryan
616.940.0241
lryan@kotzsangster.com
Tim Ryan
616.940.0240
tryan@kotzsangster.com
KSWB is a full service law firm with five offices throughout Michigan serving clients of all sizes in all areas of business, labor and employment, construction, government and public affairs and personal legal services. Whatever your situation is, we have the right lawyer--or the right team of lawyers--to provide the most efficient, comprehensive and responsive legal assistance possible.
Birmingham
300 Park St, Suite 265
Birmingham, MI 48009
T. 248.646.1050
F. 248.646.1054
Buchanan
400 E Front St, Suite G
Buchanan, MI 49107
T. 269.697.4863
F. 269.697.4867
Detroit
400 Renaissance Center Suite 3400
Detroit, MI 48243-1618
T. 313.259.8300
F. 313.259.1451
Grand Rapids
61 Commerce SW
Grand Rapids, MI 49503
T. 616.940.0240
F. 616.285.7215
Lake Orion
436 S. Broadway
Suite E
Lake Orion, MI 48362
T. 248.814.6664
F. 248.646.1054
www.kotzsangster.com
kswbinfo@kotzsangster.com |
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