Category Archives: Uncategorized

Hiring and Firing Rates Stay Low

As reported in the New York Times, the Department of Labor recently released its Job Openings and Labor Turnover Survey. The survey asks employers about changes in their workforce over the past month: how many employees they started with, how many employees left or were hired, and how many employees they had at the end of the month.

The statistics show that the rate of involuntary separations — firings and layoffs – has stayed really low. Just over 1% of the total workforce were discharged or laid off in February 2013, the month for which the survey collected data. In fact, more employees quit voluntarily than were fired or laid off. However, the survey also revealed that hiring rates remain low, at 3.3%. With total separations, voluntary and involuntary, at 3.1%, you can see why the monthly job numbers continue to disappoint.

Among other things, these numbers mean that the unemployed are still quite likely to stay that way. There are just too few jobs opening up to absorb everyone who is looking for work. In response to this continuing problem, a few states and local governments — most recently, New York City — have passed laws prohibiting discrimination against the unemployed. Although these laws don’t magically expand the number of available jobs, they at least attempt to level the playing field by prohibiting employers from excluding those who are currently unemployed from consideration when hiring. For more information about these laws, and possible discrimination claims based on unemployed status, check out Discrimination Against the Unemployed.

Employee Theft Blacklist: What Could Possibly Go Wrong?

Last week, the New York Times reported that large retail chains are pooling data on employees accused of theft, so they can avoid hiring those employees in the future (“Retailers Track Employee Theft in Vast Databases.”) That’s right: It’s an industry blacklist. And it’s not just for employees who have been convicted of theft or admitted to it. One employee interviewed for the article reported that she got into the database for failing to report another employee’s theft; another employee was reported for theft after leaving a pair of socks at a cash register.

And now the lawsuits are coming. The Federal Trade Commission is investigating whether these databases comply with the Fair Credit Reporting Act (FCRA), which requires employers who get reports on employees (such as credit reports or criminal background checks) from outside agencies to get the employee’s consent, notify the employee if the employer plans to rely on the report to take adverse action, and give the employee information on how to correct errors in the report. From the Times story and others I’ve read, it sounds like neither the employers nor the agencies gathering the alleged theft information followed these rules. (For more on the rules employers and agencies must follow, see Running Credit Checks on Job Applicants.)

But the potential legal violations go well beyond the FCRA. Many states prohibit blacklisting, for example. And, job applicants might have a claim for defamation against their former employer, if the information reported to the database is false. If there are racial or ethnic disparities in the database — for example, if a disproportionately large number of African American or Latino employees appear in its data — an employee who is turned down for a job might have a discrimination claim.

As a practical matter, the database blacklist might also lead to more claims against the former employer for wrongful termination. An employee might be willing to walk away after being fired for alleged theft, even if the accusation is false. Retail employees are often living paycheck to paycheck, and the imperative to get a new job may well outweigh the desire to clear one’s name at the old one. However, if the former employer takes steps to guarantee that the employee will never work again, the balance obviously shifts. Suddenly, a claim for defamation or false imprisonment might look a lot better if the alternative is waiting for the unemployment to run out.

Spare a thought for the employers caught in this web: Employee theft is a serious problem, accounting for almost half of all theft and $15 billion in lost merchandise in 2011, according to data From the National Retail Federation reported in the Times article. You can see why an employer would want to take any help available to avoid putting a thief on the payroll. But secret databases that report accusations and suspicions aren’t the way to do it.

Authority of the NLRB In Question . . . Again

Last week, the federal Court of Appeals for the D.C. Circuit decided an appeal of an unfair labor practices case from the National Labor Relations Board (NLRB). (The case is Noel Canning v. NLRB.) The facts of the case are not complicated: An employer and a union had a dispute as to whether the two had reached an agreement, in their final negotiating session, about how much of a proposed pay raise would go into the pension fund. The employer claimed no agreement had been reached, and it rejected the union’s vote on the matter. The union claimed an agreement had been reached, and that the employer committed an unfair labor practice by refusing to treat it as a collective bargaining agreement.

As to those facts, the union won the appeal. But the rest of the opinion eclipsed the victory. The Court found that three of the NLRB’s five members were appointed in violation of the Constitution. If this interpretation is adopted by the Supreme Court, it means not only that the Board lacks a quorum and has no authority to do anything (the Supreme Court decided that two members won’t cut it in 2010); it probably also means the NLRB won’t have enough Board members to act any time soon — unless and until the Democrats get a filibuster-proof majority in the Senate.

Why? The Board has been extremely active in trying to enforce and expand employee rights of late — and one side of the Congressional aisle is not happy about it. As I’ve posted recently, the NRLB has made a recent priority of enforcing employee rights to speak to each other about the terms and conditions of employment, whether on social media sites or during workplace investigations that the employer would prefer to keep confidential. The NLRB also tried to issue a couple of regulations that would have benefited employees, one to require employers to post a notice of labor rights and the other to speed up union elections. Both regulations were stopped by lawsuits filed by pro-business groups. How do Congressional Republicans feel about the NLRB? Here’s John Boehner’s view: “The Obama administration has consistently used the NLRB to impose regulations that hurt our economy by fostering uncertainty in the workplace and telling businesses where they can and cannot create jobs.” In fact, most of the Republican Senators and Speaker Boehner filed briefs in last week’s lawsuit, on the side of the employer.

Republican opposition to President Obama’s nominees to the Board led to the case last week. Presumably because he felt his nominees would be subjected to a filibuster (and therefore, not confirmed), the President appointed them pursuant to the recess appointments clause of the Constitution, which doesn’t require Senate confirmation. (This has become common practice by frustrated presidents of late, both Democrat and Republican.) However, the Court of Appeals found that the President’s appointments didn’t meet the constitutional requirements. First of all, the Court found that such appointments may be made only during “the” recess — in other words, the break between Senate sessions — not during any recess in Senate business. Because the President appointed his nominees during an “intrasession” recess, those appointments were not truly recess appointments. Second, the Court found that the recess appointment power may be used only to fill vacancies that arise during that same recess, which was not the case for the three seats the nominees were appointed to fill. This second requirement will limit the recess appointment power to near extinction.

This is one Court of Appeals’ opinion. Notably, the Board itself has said that it “respectfully disagrees” with the decision, and will continue to perform its duties. It will take a Supreme Court decision to decide the issue once and for all. But if the Court upholds this decision, recess appointments will be much less common. Which means nominees will get to their posts only if confirmed by the Senate, where filibusters and threats of same have held up even routine appointments. If you were thinking the change to the Senate filibuster rules would solve this problem, it won’t: Despite being called “filibuster reform,” those rules don’t do much to the filibuster. They speed up debate on lower-level nominees, but the debate has to start before it can gain steam — and the rules still require a cloture vote (60 votes or more) for that.

Caring for an Adult Child Under the FMLA

This week, the Department of Labor’s Wage and Hour Division issued its first Administrator’s Interpretation of the new year. The Interpretation clarifies who qualifies as an adult “son or daughter” for whom an employee may take time off under the Family and Medical Leave Act (FMLA).

The FMLA allows employees to take time off to care for a son or daughter with a serious health condition. If the child is 18 or older, however, additional requirements apply. The child must not only have a serious health condition for which he or she is in need of care, but must also have a disability (as defined by the Americans with Disabilities Act) that renders the child incapable of caring for him- or herself.

These requirements were already in place, set out in the law and regulations. The Interpretation makes these additional points:

  • The adult child’s disability may begin after the child turns 18. Previously, there was some confusion about a parent could take FMLA leave to care for a child who became disabled as an adult or only for a child who was under the age of 18 at the onset of the disability. The Interpretation makes clear that the age of onset isn’t a factor. For example, an employee may take FMLA leave to care for a 30-year-old child who becomes disabled as the result of a car accident or cancer diagnosis. 
  • The more lenient standards adopted in the ADA Amendments Act (ADAAA) apply to the FMLA. The ADAAA eased the requirements for proving a disability in order to ensure coverage for more people. For example, a disease that would be disabling when active counts as a disability, even when it is in remission. (For more on the ADAAA, see Nolo’s article ADA Amendments:  More Protections Against Disability Discrimination.) This broader standard is to be used when determining whether an adult child has a disability.
  • Not every disability will qualify under the FMLA, however. The adult child must also be incapable of self-care, which will not be the case for every disability. Someone is incapable of self-care only if that person requires “active assistance or supervision” in at least three activities of daily living. These include basic activities such as grooming and hygiene, bathing, dressing, and eating. They also include things like cooking, shopping, maintaining a home, using public transportation, and so on. An adult child whose disability is in remission or controlled by medication may be fully capable of self-care; therefore, the child’s parent would not be entitled to time off under the FMLA.
  • Employees may be able to use regular FMLA leave to care for an adult child who is injured in military service. Currently, the FMLA gives employees whose children suffer a serious illness or injury while serving in the military the right to take 26 weeks of leave in a single 12-month period. However, this leave entitlement doesn’t renew every year, like the other types of FMLA leave (for which an employee may take only 12 weeks off per year). Unless the adult child suffers a new injury, or another of the employee’s children is also injured, the employee’s right to take 26 weeks off is a one-time-only entitlement. The Interpretation clarifies that an employee who has used up this leave may, in the following year, be entitled to take regular FMLA leave if the adult child’s serious injury qualifies as a disability and renders the child incapable of self-care. This will be a significant relief to parents of wounded service members, whose injuries often require extended or even life-long assistance.

You can find detailed information on every aspect of the FMLA, including how it dovetails with the requirements of the ADA, in The Essential Guide to Family and Medical Leave.

Payroll Taxes Headed Back Up

The morning papers reported that our elected representatives “celebrated” New Year’s Eve a day early, staying up past midnight on December 30th trying to hammer out a deal to avoid the fiscal cliff. Despite making slow progress towards each other, the two sides so far haven’t managed to come up with just the right combination of continuing tax cuts, extension of unemployment benefits, tweaks to the formula for calculating how much Social Security benefits will increase for inflation, estate tax changes, fixes for the alternative minimum tax, tax increases for capital gains, and . . . wait, have I left anything out? As you can see, there are plenty of moving parts.

But deal or no deal, there seems to be one thing we can say for certain: Payroll taxes are going up. After enjoying a reduced rate for a couple of years, every wage earner in this country is going to have to pay an additional 2% of their income to the IRS to fund Social Security. We all use to fork over 6.2% of our paychecks to the IRS for Social Security; our employers had to pay the same amount per employee. In 2010, however, President Obama signed a law that reduced worker contributions to 4.2% (employers still had to contribute the higher amount). This temporary measure is expiring tomorrow, and one of the few things Republicans and Democrats seem to agree on is that they aren’t planning to extend it. Given that it was a fairly obvious example of robbing (future retiree) Peter to pay (still working) Paul, this seems like a sensible choice, if an unhappy one for all of us working stiffs.

Supreme Court Upholds Healthcare Reform

In a fairly major surprise, a slim and somewhat unusual majority of the Supreme Court today upheld the individual mandate of President Obama’s Affordable Care Act. You can find more information in my article, Health Care Law Upheld by Supreme Court.

Supreme Court Gives Religious Employers a Big Defense in Discrimination Cases

Last week, the Supreme Court decided an employment discrimination case against a Lutheran school, Hosanna-Tabor v. EEOC. The case involved a teacher who claimed she was fired in retaliation for asserting her rights under the Americans with Disabilities Act. (The teacher, Cheryl Perich, had taken a leave of absence after being diagnosed with narcolepsy, and was asked to resign when she tried to return to work.) The school argued that it had to be free to choose the employees who acted in a ministerial role, and that its decision to fire Perich was therefore beyond the reach of the civil court system. The Supreme Court agreed, for the first time explicitly recognizing a “ministerial exception” to the ADA and other federal civil rights laws.

The parties agreed on the facts of the case. Perich was what the school refers to as a “called” teacher, which means she had completed a course of instruction on the Church’s beliefs and was asked to teach under the formal title “Minister of Religion, Commissioned.” This position gave Perich certain advantages over the school’s lay teachers, including more job security and some tax breaks. Perich’s duties were largely the same as those of the lay teachers.

Perich was diagnosed with narcolepsy and was out on disability leave at the start of the 2004-2005 school year. In January of 2005, she told the school she was ready to return soon; the school had already hired a lay teacher to replace her for the rest of the year. The congregation of the Church voted to give her a “peaceful release” from her call, by which it would pay a portion of her health insurance premiums if she resigned. Her response was not to peaceful: She refused to resign, told the school her doctor had released her to return to work on February 22, and showed up at the school on that day. She refused to leave until she was provided with a written acknowledgment that she had showed up. The school informed her that she would be fired, to which she responded that she had spoken to a lawyer and intended to assert her rights. She was fired and filed a lawsuit for retaliation under the ADA.

The Supreme Court found that Perich’s lawsuit was barred by the ministerial exception. Although lower courts had recognized this exception to federal laws prohibiting discrimination, this is the first time the Supreme Court has done so. Pursuant to this exception, grounded in the Establishment Clause and Free Exercise Clause of the First Amendment, religious bodies must be free to decide who will “preach their beliefs, teach their faith, and carry out their mission.” A discrimination lawsuit infringes that right by dictating whom the religious institution must hire or retain.

A couple of things interested me about this case. First of all, the Court refused to set clear guidelines on who qualifies as a “minister,” saying it was reluctant to adopt a “rigid formula” in its first case on the issue. The Court said that the facts in this case, including the effort required to be a called teacher, Perich’s use of the term for herself (and willingness to take advantage of the tax benefits), and her religious responsibilities, all added up to ministerial status. The concurring opinions took up this issue, with Justice Thomas proposing that courts should defer to the religious body’s good faith statement that someone is a minister. Justice Alito also wrote separately to emphasize that all religions should be entitled to this exception, not just those that have “ministers,” ordain certain members, or otherwise utilize the nomenclature and rites of the Protestant Church. This leaves a lot of leeway for future courts to decide how much analysis and probing is allowed of a religious institution’s assertion that a person qualifies as a minister under the exception.

Second, the school’s stated reason for firing Perich was that her threat to sue violated Lutheran doctrine that disputes should be resolved internally rather than through resort to the courts. But according to the facts, this threat came only after the school had told her she would be fired, so it’s hard to see how the internal dispute resolution process was still available to her. And, the Court’s unanimous opinion didn’t take up this part of the case at all. Essentially, the school is saying that this doctrinal belief essentially required it to retaliate against Perich, just as Catholic doctrine precluding ordination of women would require that Church to discriminate on the basis of sex. It’s not clear what evidence was presented to the lower courts based on the Court’s opinion, but it seems to me that religious employers relying on a defense this extreme should have to show that the belief is in fact held, and in good faith. For a court to analyze whether that belief is “valid” or correct in some ultimate sense would of course violate the First Amendment. But there should at least be some requirement that the belief is genuine and not a pretext for discrimination. A similar standard applies to employees who want a religious accommodation: Courts don’t examine the ultimate rectitude or logic of their beliefs, but do require that they be genuinely held and be religious in nature. To the extent religious organizations are claiming an exemption from laws so fundamental to our society, it seems they should be subjected to the same requirement. This wouldn’t give courts the right to say what a Church’s doctrine should be, but only what the Church’s doctrine actually is.


Social Media Freedom “More Important Than Salary” to Generation Z

A couple of weeks ago, Cisco released its second annual Cisco Connected World Technology Report — and the findings were truly eye-opening. (Here’s Cisco’s press release, which includes the highlights; they were also featured in the news article “Millenials Put Tech Freedom Before Salary.”) For the report, Cisco surveyed more than 2,800 college students and young professionals in 14 countries — the so-called “millenials” or Generation Z. Given the generally crummy state of the economy, I thought those who were looking for jobs (or soon to be ) would list their primary concerns as, well, just whether they’d be able to find work, along with salary, salary, and salary. (As in, is it enough to get my own place, or will I be living with my parents until the end of time?)

But no. According to this survey, it’s all about social networking, portable electronic devices, and working from home or other remote locations. Here are a few choice bits:

  • More than half said that if their company banned access to social media sites from work, they would either turn down a job offer or find a way to get around the prohibition.
  • 40% of college students — and 45% of young professionals — said they would accept lower paying work if it offered more flexibility regarding social media access, mobility, and device choice.
  • About 70% said they should be allowed to access personal sites and social media sites using company-owned devices.
  • About 30% said they should have the “right” to work remotely once they get work; 70% believe it unnecessary to be in the office regularly, as long as they show up for important meetings (I’m with them on that).

What to make of these findings? On the one hand, it gives employers a blueprint for attracting the best applicants of the youngest working generation: Let them work remotely, access social media sites from work, choose their mobile devices, and use your equipment for personal as well as business reasons. On the other hand, there are some fairly sound arguments to be made for having rules in place that separate business from personal, at least in electronic devices. Want to be liable for employee overtime you didn’t even know about? Let employees do work using their personal electronic devices. Interested in exposing yourself to personal injury lawsuits? Let employees use their company-issued smart phones for personal calls and texts, then wait for them to do it while driving. Sexual harassment lawsuits more your thing? Encourage managers to friend employees on Facebook, then wait for the nude pics to show up. The truth is that unless and until the legal climate changes to accommodate the blurring of personal and professional lives that younger generations embrace, it might be tough to offer the types of electronic freedom these future workers of the world want.

Wal-Mart 2.0: California Employees Sue for Sex Discrimination

Remember that gigantic class action the Supreme Court threw out against Wal-Mart? In that case, three named plaintiffs sought to sue the giant retailer for sex discrimination in pay and promotions, on behalf of more than a million female employees nationwide. As I noted in an earlier post, the Supreme Court tossed the case, finding that there was no commonality among the proposed class. The court pointed out that the pay and promotion decisions the women complained of were made by different managers nationwide, among other things. Although the women claimed that they had the common experience of facing discrimination because Wal-Mart gave its managers unfettered discretion to make pay and promotion decisions with a corporate culture that relied heavily on gender-based stereotypes, the Court didn’t buy it.

Yesterday, the employees’ lawyers rebooted, with what they’ve called “Wal-Mart 2.0.” They filed a class action lawsuit on behalf of California employees only — an estimated 90,000 of them — once again alleging sex discrimination in pay and promotions. According to the plaintiffs’ press release, the revised complaint relies on new statistical evidence showing pay disparities between male and female employees in comparable positions, even though the women tend to have more seniority and better performance evaluations. The complaint also alleges biased statements by decision makers and statistical evidence of bias in promotions, among other things. (You can check out the press release and the complaint; the plaintiffs’ website provides lots more information on the case.)

The lawyers for the employees have promised that this is the first in an “armada” of state and regional lawsuits to be filed against Wal-Mart in the coming months, designed specifically to meet the Supreme Court’s objections that the original nationwide class had experiences that were too diverse to join in a single lawsuit.

President Obama’s Jobs Bill Would Prohibit Discrimination Against Unemployed

For the past couple of weeks, President Obama has been heavily promoting his jobs bill. Among other things, the bill would extend — and increase — the current cut in payroll taxes. Rather than paying 6.2% toward Social Security, employees currently pay 4.2%. The jobs bill would cut this further, to 3.1%. It would also cut the employer’s matching contribution to the same percentage. (This part is new; currently, only employees are enjoying a tax cut.)

Other employment related provisions include an extension of the additional unemployment benefits currently available to the long-term unemployed, through January 2012. The bill would also increase tax breaks for employers who hire certain disabled veterans, and require employees who earn more than $200,000 (single) or $250,000 (married) to pay income tax on their employer-provided health insurance benefits.

Perhaps the most interesting provision would prohibit discrimination against the unemployed. This prohibition would apply to the same employers covered by Title VII, including private employers with at least 15 employees. An employer who posted a job advertisement excluding the unemployed or refused to hire applicants because they are unemployed would violate the law. The Equal Employment Opportunity Commission would have enforcement responsibilities, and applicants whose rights were violated would be entitled to the following remedies:

  • an injunction prohibiting the employer from continuing its discriminatory practice
  • reimbursement of costs caused by the illegal practice
  • attorney fees, and
  • liquidated damages of up to $1,000 per day that the violation continued.

The bill would also prohibit retaliation against those who oppose practices made illegal by, or assert their rights under, the law. You can read the text of this provision here, at the President’s website.