LEL Flash | Issue: March 2014

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Issue: March 2014

Comments from the Chair

Still on the Road

Reports that I have been lost on an exotic photographic exploration of the Midwinter Meeting locations are premature and false. I am still in the field and meeting the tremendous volunteers who work quite diligently for our Section and a number of government officials, including board and commission members, agency directors, and government attorneys who have attended the meetings. They give our members a special opportunity to hear them speak on issues involving their agencies and to have one-on-one conversations. This is clearly a key advantage to attending the Section's Midwinter Meetings.

Our Midwinter Meetings are still underway and will continue through May with the National Symposium on Technology in Labor and Employment Law, presented by our Technology in the Practice and Workplace Committee, from April 30 to May 2, and the International Labor and Employment Law Committee Midyear Meeting in Tel Aviv, Israel from May 3 to 8. The meetings I have attended have been excellent and have provided substantive material that will be very useful in our practices. This issue of FLASH will highlight only some of the many important sessions from a number of outstanding committee panels.

Federal Sector Labor and Employment Law Committee

EEOC General Counsel Report

The only committee which meets on an annual basis in Washington drew its largest attendance ever to hear speakers ranging from the EEOC General Counsel, the Chairman of the Federal Labor Relations Authority and practitioners, the General Counsel of the U.S. Merit Systems Protection Board and the Director of Policy and Congressional Affairs of the U.S. Office of Special Counsel. Obviously, holding meetings in a convenient location without major travel commitments not only attracts members who have limited resources for travel but also government officials for whom long distance travel is a major burden.

In this meeting, David Lopez, EEOC General Counsel, spoke about the six priority areas of the EEOC. He said the purpose of the Commission's strategic enforcement plan is to focus and coordinate EEOC programs to have a sustainable impact on reducing and deterring discrimination. The six national enforcement priorities are: eliminating barriers in recruitment and hiring; protecting immigrant, migrant and other vulnerable workers; addressing emerging and development issues; enforcing equal pay laws; preserving access to the legal system; and preventing harassment through systemic enforcement and targeted approach.

In the area of hiring and recruitment, the agency will be looking at exclusionary policies and practices, restrictive application processes and screening tools, and the steering of particular groups of workers into specific job types. The use of arrests and convictions as screens was discussed in the Commission's enforcement guidance issued on April 25, 2012, on the consideration of arrest and conviction records. Employer hiring decisions are also to be reviewed on the basis of race and national origin, sex and within each category for disparate treatment and disparate impact.

The second employment enforcement priority deals with immigration and migrant workers, and the Commission's efforts will focus on abusive pay, job segregation, harassment and human trafficking, which is a matter of great concern to the ABA and to the Section. The recent Section newsletter article focused on the need for lawyers to do pro bono services to assist victims of human trafficking. In EECO v. Henry's Turkey Service, the EEOC attained the highest verdict in the history of the EEOC and the second highest under federal anti-discrimination laws. The jury entered a verdict in $240,000,000 in favor of the EEOC for 32 disabled victims of discrimination, back pay discrimination claims in the amount of $1,3000,000, and $7,500,000 each to 32 disabled victims consisting of $2,000,000 in punitive damages and $5,500,000 in compensatory damages. The verdict was eventually reduced to $1,600,000, or 0.67 percent of the jury verdict per person.

Addressing emerging and development issues is priority number three that deals with the EEOC response to demographic changes, i.e., an aging work force, recently enacted, developing judicial and administrative interpretative theories. This area will include ADA coverage issues, accommodating pregnancy-related limitations and coverage of LGBT individuals under Title VII. In EEOC v. Houston Funding, 717 F3d. 425 (5th Cir. 213), the court held that the discharge of an employee because the employee was lactating or expressing milk states cogniza sex discrimination claim under Title 7.

Under enforcement priority four, enforcing equal pay laws, EEOC will target compensation systems and practices that discriminate against employees based on gender.

Enforcement priority number five is to preserve accesses to the legal system. The agency will target policies and practices that discourage or prohibit individuals from exercising their rights to EEOC investigation and enforcement efforts. These include retaliatory actions, overly broad waivers, settlement provisions that prohibit filing of charges or providing EEOC information of an investigation or prosecution, and failure to retain records required by EEOC regulations.

Priority number six is designed to prevent harassment through systemic enforcement and targeted outreach, and the Commission intends to educate employers and employees combined with systemic enforcement actions in an effort to greatly deter future violations.

The General Counsel's paper containing case citations in this area is available on the Committee's archive of meeting papers.

Reasonable Accommodations

Chris Hexter, member of the Section and Council Liaison to the Committee, and Mark Maxin, Assistant General Counsel for the U.S. Nuclear Regulatory Commission, discussed a very unusual reasonable accommodation case raising under the ADAAA by reenacting the facts of a hiring case involving a deaf lifeguard, who applied for a position at a wave pool to perform lifeguard functions. Each of them took a different aspect of the case to act out how the mother of the applicant promoted her son's desire to work in this job and the employer taking a position that the job could not be performed by someone who is deaf. The discussion between the two of them was based upon the facts of Keith v. County of Oakland, 703 F3d 918 (6th Cir. 2013). This was a very clever way of demonstrating a real life situation in which Nicolas A. Keith, who was born deaf, with a cochlear implant was able to detect noises such alarms, whistles and people calling to him. He was not able to speak and used American Sign Language to communicate. The issues in the case involved whether Keith was qualified to perform the duties of a lifeguard, did the employer fail to perform an individualized investigation of his qualifications, and did the employer engage in an interactive process to determine what reasonable accommodations, if any, were necessary for him to perform the essential functions of the job. The district court granted summary judgment on behalf of the employer, and the Sixth Circuit reversed and remanded the case for trial. This is a very instructive demonstration of an important case arising under the ADAAA.

Federal Labor Standards Legislation Committee

The members of this committee studied developments under the Fair Labor Standards Act, Family and Medical Leave Act, USERRA, Sarbanes-Oxley Act, ADEA, WARN, and government contracts, including the Service Contract Act, the Davis Bacon Act and Federal Contractor Employee's Act.

Caregivers Subject to New FLSA Minimum and Overtime Regulation

Although the committee was presented with information in all of these areas over the course of its two-day meeting, this article will focus on the presentation by Jennifer S. Brand, the Assistant Solicitor of Labor-FLSA, who spoke about a major incentive of the Department of Labor final rule issued on October 1, 2013, to be effective on January 1, 2015, interpreting the Fair Labor Standards Act to require that direct care workers be entitled to receive the federal minimum wage and overtime protections. These direct workers are those persons who provide home care services, such as certified nursing assistants, home health aides, personal care aides, caregivers and companions. Congress amended the FLSA in 1974 to extend coverage to all domestic service workers, including those persons employed by private households or companies too small to be covered by the Act. An exemption was created at that time from the minimum wage and overtime requirements for domestic service workers, who provide companionship services and for workers who reside in the households who provide those services, i.e., live-in domestic service workers. The "companionship" services exemption was to apply to "elder sitters," whose primary responsibility was to watch over a person with an illness, injury or disability in the same manner as a babysitter watches over children. This exemption was not intended to exclude "trained personnel such as nurses with a registered or practical" from the protection of the Act. In recent years, the home health industry has under gone major changes, and the DOL uses the term "home care industry" to include providers of home care services and the term "home care services" to describe services performed by workers in private homes whose job titles include home health aide, personal care attendant, homemaker, companion and others. This new regulation is intended to deal with direct care workers who are not elder sitters but who work under job titles including certified nursing assistants, home health aides, personal care aides and care givers performing increasingly skilled duties. As this kind of work has become more professional, direct care workers employed by individuals and third parties have been excluded from the minimum wage and overtime protections of the FLSA under the companionship service exception. The final rule updates the definition of "companionship services" to restrict the term to only encompass those workers who provide the sorts of limited, non-professional services, such as the provision of fellowship, protection of an elderly person with an illness, injury or disability who requires assistance in caring for himself or herself, and "fellowship" means engaging the person in social, physical and mental activities, and "protection" is defined as being present with the person in his or her home, or to accompany the person outside of the home and to monitor the person's safety and well-being.

The income transfers from home care agency to workers on the minimum wage issue are expected to be zero because current wage data suggests that few affected workers, if any, are currently paid less than the federal minimum wage per hour. The income transfers to direct care workers are expected to be at an annual average of $321.8 million and will result from the "narrowing of the companionship service exemption, specifically: payment for time spent by direct care workers traveling between individuals receiving services (consumers) for the same employer, and payment of an overtime premium when hours work proceed 40 hours per week." 78 Fed. Reg. 60456 (Oct. 1, 2013).

Occupational Safety and Health Law Committee

Temporary Staffing Employers as Joint Employers with Host Companies

OSHA's initiative evolving temporary workers and staffing agencies was the subject of the general session at the OSH Law Committee Midwinter Meeting on March 13, 2014. The principal OSHA representative at that session was Thomas Galassi, Director of the Directorate of Enforcement programs for OSHA. On April 29, 2013, OSHA issued a memorandum titled Protecting the Safety and Health of Temporary Workers, which instructs inspectors to determine within the scope of their inspections whether there are any temporary workers and whether any of the identified temporary workers are exposed to OSHA violations. The clear intent of this initiative is to cover stamping agencies under OSHA and to create joint liability between the staffing agency and the host company for OSHA violations. Orlando J. Pannocchia of the Office of the Solicitor spoke about the Department's position that both the host and temporary employment or staffing company will be jointly liable for OSHA violations in the same manner in which joint liability has been found under other labor relations statutes, such as the National Labor Relations Act, Fair Labor Standards Act, Title VII and Family and Medical Leave Act. He noted that the gross sales volume with the temporary staffing industry is $117 billion per year. Section 3 of OSHA refers to a person for purposes of coverage as one or more persons, partnerships or corporations, and this is the justification under which joint liability will be sought by the Solicitor of Labor. The April 29, 2013 memorandum notes that OSHA has received a series of reports on temporary workers suffering fatal injuries during their first day on the job, and in some cases, the employer failed to provide safety training or, if some instruction was given, it inadequately addressed the hazard, and this failure contributed to the death of the workers. It also states: "Given the number of temporary workers and the recent high profile fatal incidents, the agency is making a concerted effort using enforcement, outreach and training to ensure that temporary workers are protected from workplace hazards." Steven C. Dwer, a representative of the American Staffing Association, a trade association representing 85 percent of the gross volume of sales in the industry, stated that the industry welcomes the OSHA initiative and presented a paper that included recommendations for staffing companies to follow best practices to manage workplace injuries, proper class indication of workers, risk management, sales processes, cooperation and communication with host clients, screening of candidates, orientation of new employees, safety training and ongoing communication. He noted that workers' safety is a chief concern, injured workers have recruiting implications, and a safer workplace will help reduce workers' compensation costs. A recent OSHA instruction to field inspectors states that a "temporary worker" for purposes of this initiative is one who is working under a host employer/staffing agency employment instructor and does not include day laborers or seasonal workers, who are hired by a single employer and does not include contractor and subcontractor relationships (OSHA Memorandum September 5, 2013).

Railway and Airline Labor Law Committee

Two important case developments of general interest to lawyers beyond those who practice in this area were discussed during this Midwinter Meeting. Although the members of the railway and airline bar are relatively small in number, they represent some of the largest corporations in America and union lawyers who represent the employees of these companies and have an expertise in dealing with significant labor disputes that have the great potential of harming the economy and shutting down transportation. It is clear from attending this meeting that this is a remarkably congenial group given the high stakes involved in the disputes in which they deal. The subject area is limited to the Railway Labor Act, but reports this year are important for those who work beyond these two industries.

Petitions to Vacate Arbitration Awards

The first case involves the unique nature of tripartite arbitration panels, economic threats to an arbitrator and an arbitrator recusal. The implications for this case involving petitions to vacate arbitration awards are significant whether the matter involves a single arbitrator or a three person panel, which is quite common for arbitration cases under the Railway Labor Act. In United Transportation Union v. BNSF, 710 F3d. 915 (9th Cir. 2013), a court dealt with a petition by the union to vacate an arbitration award on the grounds that it had been obtained by corruption.

The arbitrator in this case presented a draft arbitration award in executive session to a three member panel, and according to the neutral's notes, the company representative had previously agreed to the reinstatement of the employee, changed his mind, and then stated: "If you are going to issue these kind of opinions, you will never work for a Class One railway again." The arbitrator then recused herself from the case, and the matter was assigned to a second arbitrator who issued an award denying reinstatement to the worker. The union argued that the second arbitrator had been made aware of the economic threat to the first arbitrator, and it was plausible that the decision of the second arbitrator might have been based upon some fear of economic retaliation from the railroad. The district court dismissed this case, but upon appeal, the Ninth Circuit concluded that the union had properly stated a claim upon which relief could be granted with regard to the second arbitration award. Tying the two claims together, the court believed that the union's interpretation of the alleged threat could be "a threat of economic retaliation that threatens the integrity of the arbitral proceedings which could be a form of extortion, a category of corruption under the Railway Labor Act. The case was then remanded to the district court to allow the court to attempt to prove its allegations of corruption.

After this case was presented to the members of the committee by one of its members, arbitrator Barry E. Simon, there was a fascinating and spirited discussion about the role of the arbitrator, the impact of the alleged company threat, the integrity of the arbitration process, whether the union should have filed the claim, and how the process will now proceed in the district court. At this stage of the proceedings, there will be discovery involving issues concerning the decision making, the threats and related matters. This case clearly has implications for non-Railway Labor Act cases in involving attempts in vacate arbitration awards.

Government Contractors and OFCCP

Also of general interest are recent cases involving the Office of Federal Contract Compliance Programs charged with enforcing executive order 11246, prohibiting discrimination and requiring affirmative action, Section 503 of the Rehabilitation Act of 1973, the Vietnam era Veterans' Readjustment Assistance Act of 1974, and regulations involving federal contractors. OFCCP requires federal contractors to have affirmative action programs, file EEO-1 Reports, Vets 100/100 A Reports, records keeping, posting notices and requiring that contractors invite all applicants to identify as an individual with disabilities or as a protected veteran when they apply for work.

The new development is that these rules will apply to companies that provide services to as distinguished from products to government agencies. A hospital group in Florida that provided healthcare services to the Department of Defense was determined to be covered by the OFCCP, OFCCP v. Florida, AB Case No. 11-011 (ALJ Case No . 2009-)C-002 (July 23, 2013), as was a law firm that provided legal services to the Department of Energy, OFCCP v. O'Melveny & Myers, ARB Case No. 12-014 No. 2011-OFC-007)(August 30, 2013).

Joel D'Alba
Chair, ABA Section of Labor and Employment Law


Opening Page

Flash Co-Chairs:

Jeremy J Glenn, Meckler Bulger et al | Monique R. Gougisha, Ogletree Deakins | Amy F. Shulman, Broach & Stulberg LLP | Jennifer R. Spector, National Labor Relations Board

American Bar Association Section of Labor and Employment Law
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