LegalMatch: Employment Law

Manager Files Suit against Prominent Law Firm Alleging Pregnancy Discrimination

A business development and communications manager of an international law firm is suing her former employer over claims that she was laid off because of her pregnancy, age, and gender. Plaintiff Cortney Nathanson worked at Jones Day, an international law firm that was founded in 1893. It is the largest law firm in the United States and one of the ten largest law firms in the world.

What is the Lawsuit About?

Nathanson was 44 years old when she left Jones Day last year after having her baby. She went on maternity leave in October 2014 and was supposed to go back to work in January 2015. Nathanson extended her maternity leave for two months in early 2015 following her postpartum depression. Her complaint alleges that her work was unnecessarily scrutinized upon her return and that her supervising partner misrepresented the urgency of various projects in order to dupe Nathanson to misdirect her focus.

Nathanson worked at the firm for 13 years. Her duties included handling client proposals, events, client research, lawyer coaching, among other duties. She worked at Jones Day’s New York office. Nathanson made $280,000 a year.

Nathanson’s complaint alleges she was one of five women who were over 40 years old when they were fired as part of a firm-wide restructuring. She was allegedly given a release from Jones Day offering her almost $50,000 in exchange for a release of all claims against the firm, which she refused to sign.

Discrimination

Nathanson’s pregnancy, age, and gender allegations are all based on claims of discrimination.

When a woman has a baby, she’s permitted to leave work for a specific amount of time. This leave of absence is known as maternity leave. While New York State does not have a maternity leave law, many employees, both men and women, are entitled to request up to 12 weeks of unpaid leave per year to care for their newborn child.

A woman is also entitled to take an additional time off for disability if she is actually unable to work due to pregnancy or childbirth. The maximum period of disability under the law is 25 weeks, but it requires the woman submit medical documentation to support her claim.

In general, pregnancy discrimination occurs when an applicant or existing employee is treated unfavorably because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. Similarly, age discrimination occurs when an applicant or employee is treated less favorably because of his or her age. The Age Discrimination in Employment Act (ADEA) only forbids age discrimination against people who are 40 years or older. Gender discrimination involves treating an applicant or employee less favorably because of his or her gender.

What are the Chances Nathanson Will Prevail?

Based on the facts of this case and the legal manpower of defendant Jones Day, they will probably file a motion for summary judgment. A motion for summary judgment is a request for the court to rule that the other party has no case. It is a complicated legal motion filed by the defendant. If granted, it means the case will be thrown out altogether.

Jones Day will argue that they had non-discriminatory reasons for letting Nathanson’s go – namely, her work had become inadequate, perhaps her attitude affected her work product, among other non-discriminatory reasons.

To defeat a summary judgment motion, all a plaintiff needs to do is demonstrate that there is a “dispute as to a material fact in the case.” In other words, there must be disagreement about a fact regarding the case; legally, it’s a very low threshold. Here, Nathanson would argue that the non-discriminatory reasons are a mere pretext for the real reason for her firing, whether her pregnancy, age, gender, or combination of all three. What is important to note that the law doesn’t require Nathanson to prove that discrimination was the purpose for her firing at the summary judgment stage. Instead, she just needs to show that there’s a dispute as to the discrimination issue, and the case will go forward.

Nathanson can likely defeat a summary judgment motion, but further assessment of the facts of her case would be required to determine whether her claims will prevail at trial. Most cases settle before trial for undisclosed amounts.

Authored by Erin Chan-Adams, Legal Match Legal Writer and Attorney at Law

On-Call Ok? The Changing Rules for Last Second Scheduling

Would you accept a job if you weren’t certain what your hours would be? What if you needed to be paid, but were told not to come to work? Forever 21 is being sued for scheduling their minimum wage retail employees for on-call shifts.

However, Forever 21 is not alone. Gap, Old Navy, Victoria’s Secret, Banana Republic, Pac Sun, and Tilly’s have all been sued for the same thing. What’s more, the law firm which brought several of these lawsuits has stated that there are several more to come.

What Is an On-Call Shift?

The concept of being on-call is one that many people are already familiar with—although usually in the context of a doctor or surgeon who can be called to see a patient at any time.

On-call shifts for retail employees are similar in practice, if not necessity. Essentially, a retail employee assigned to an on-call shift must call their employer an hour or so before their on-call shift begins and their employer tells them whether or not they need to come in and work.

These sort of shifts cause serious issues for employees as they require them to block out sections of their day that they may or may not get paid for. Beyond the obvious inconvenience, these on-call shifts require unneeded or last minute child care, make it impossible for a student employee to schedule classes, and prevent employees from accepting work at a second job as they can never know whether they’ll be required to work an on-call shift.

There is federal law requiring standby pay where an employee is required to remain on or near an employer’s premises and cannot use that time standing by for their own purposes.  For instance, a firefighter playing checkers at the firehouse while waiting for an alarm would receive standby pay.  Typically, a case involving standby pay would require a showing of, among other things, how close the employer required the employee to stay to their place of work.  On-call shifts generally have no geographic requirements whatsoever, so standby time laws don’t apply to them.

New York has laws requiring that any employee scheduled to report for work on a day must be allowed to work a minimum of four hours or the number of hours in a regularly scheduled shift—whichever is less. California has law requiring “reporting time pay” which requires any employee given an on-call shift that they don’t work to be paid half of a normal day’s wages—but not more than four hours or less than two.

Other states with laws dealing with on-call shifts include: Connecticut, Massachusetts, New Hampshire, New Jersey, Oregon, Rhode Island, and Washington, DC. Often, case law has held that a requirement to report requires a requirement to physically show up at work. However, California has recently sent a lawsuit on that very issue up to the 9^th Circuit Court, which will likely make a ruling on the issue very soon. 

As it stands, the only place with a law outright banning the practice of “just-in-time” on-call scheduling is San Francisco—requiring employers to give employees schedules with two weeks’ notice. However, California, New York, Connecticut, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Oregon, and D.C. all have pending legislation on the issue—albeit with each state having different standards and approaches.

Even if these pass—and the D.C. legislation seems on the cusp—many states will still have no law whatsoever to stop companies from requiring their employees to stress over whether they’ll actually be working on any given day they’re scheduled. However, there are many who are working to end the practice.

States Taking Action

In 2015, New York Attorney General Eric Schneiderman sent out a series of letters requesting information about on-call shifts from businesses including Abercrombie & Fitch, J. Crew, Gap, Urban Outfitters, Pier 1 Imports, and Bath & Body Works. All the businesses who were sent a letter either agreed to stop using the on-call shifts or denied ever using them in the first place

Just a few months ago, Mr. Schneiderman sent another set of letters, this time to Aeropostale, American Eagle Outfitters, Coach, David’s Tea, Forever 21, PacSun, and Vans. What’s more, the New York Attorney General’s letters where accompanied by letters from the attorney generals of eight other states and Washington D.C—all seeking an end to on-call shift scheduling. These other attorney generals have sent letters to businesses such as Payless and Walt Disney Co.

Business Taking Notice

This concerted effort by the attorney generals of so many states has sent a message to businesses. There are people interested in prosecuting unfair scheduling and people who will make legislation stopping on-call shifts a priority. Legislation explicitly protecting against such scheduling is close to becoming a reality in several states. In response to the letters and added pressure, many companies such as Urban Outfitters and Victoria’s Secret have agreed to stop using on-call shifts nationwide.  This agreement also extends to all of these companies’ subsidiaries.

Many critics of the rules have pointed to the two weeks scheduling notice requirement in San Francisco’s laws as overly onerous. However, these critics speak of the law as if it had no leeway whatsoever. The law only applies to retail chains with at least 40 stores worldwide and 20 or more employees—it doesn’t target small restaurants with a few employees that may need more wiggle room in their scheduling. It requires one week notice for any changes to schedule, but has a slew of exceptions including unexpected issues, shift trading, or employees calling in sick and needing to be replaced.

On-call shift scheduling is not a necessary business practice. There are numerous global retail chains that get by just fine without it. The legislation restricting the practice is not overly onerous regulation, coming down hard on business. It is protection allowing employees to live their lives without the stress of being unable to plan their lives.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

Florida Supreme Court Unchains Attorney’s Fees for Workers’ Compensation: Will This Help Employees?

Over the last decade there has been a nationwide trend of changing the rules when it comes to workers’ compensation.  There has also been a trend of these changes not being in the best interests of the employees workers’ compensation seeks to protect. If you were told that Florida has substantially limited the amount an employee’s attorney can receive in fees in a workers’ compensation case, you’d probably think that Florida was bucking this unfortunate trend.  What if I told you that this was actually a serious blow against employees in workers’ compensation cases…and the Florida Supreme Court agrees?

Attorney Fees in Workers’ Compensation Cases

So I’m obviously crazy, or at a minimum, a lawyer trying to pull the wool over your eyes. How could lowering attorney’s fees be a bad thing?  The answer lies in the nature of fee agreements in worker’s compensation cases and how attorney fees work when an employee wins a workers’ compensation case.

In most states, the law limits a lawyer’s fee to a percentage of the amount their client, the employee suing, receives in workers’ compensation benefits. This way, hiring an attorney can’t cost more than the employee receives out of their services. However, despite this, attorneys will still track of their hours and tell clients their hourly rate.

Many states allow for situations where the employer or the employer’s insurer essentially pays the employee’s attorney fees.  This usually occurs where the employee wins the case after the employer substantially slowed down the legal process—often by attempting to litigate the employee into the ground.  In most states, the fees the employer has to pay aren’t subject to the limitations that would apply if the employee was paying.  This means that, when an employer is particularly aggressive in a case, they run the risk of getting stuck with the full bill based on the hours they made the attorney work.

Florida Fees: A Trip Down Legislation Lane

Rules requiring employers to pay their employees attorney fees in certain situations have been a part of Florida law since 1941.  Statutory limitations on attorney fees have cropped up in Florida law for nearly as long.  Percentage based caps on attorney fees have been repeatedly introduced in statutes passed by Florida legislators, only to be subsequently rejected by the Florida courts.

Each time a court has questioned a statute requiring percentage caps, the Florida legislators have tightened their grip and made a stricter version of the law. In 2009, Florida legislators introduced the current, and strictest, version of the law.  The 2009 version removed any mention of a requirement of “reasonableness” in fees, instead requiring all fees to follow a percentage formula in the statute. The statute left no way to dispute the statutory scheme for attorney’s fees.  The only awards that could be accepted by an attorney, or even awarded by the court, were fees capped at a percentage based on the amount and duration of the award for benefits.  Florida law actually made it a crime for a lawyer to accept any other type of fees, whether their client agreed to them or not.  Most importantly, the new statute applied these caps in almost every situation where an employer would have to pay an award of attorney fees to their employee.

The Case of Castellanos

This new version of the law was the point of contention in the recent Florida Supreme Court case Castellanos v. Next Door Company.  The case started as a fairly straightforward workers’ compensation case.  Marvin Castellano was injured on the job, and Next Door authorized him to seek medical treatment.  The doctor Castellano’s employer sent him to said he had injuries to his head, neck and right shoulder.  The doctor recommended a course of treatment.  However, Next Door and their insurer Amerisure refused to authorize the recommendations of their own doctors.  Castellano sought benefits in court.

This is where things got nasty for Mr. Castellano. Next Door and Amerisure raised, according to the Florida Supreme Court, between 13 and 16 defenses refuting Mr. Castellano’s claims.  His attorney worked around 107 hours refuting these defenses while Next Doors attorneys worked 113 hours. 

When the dust settled, Mr. Castellano was victorious. He received his benefits of $822.70.  Even better, he was awarded attorney fees due to Next Door’s vigorous refutation of his claims.  Castellano’s attorney asked for the value of his hours worked—$36, 817.50.  However, with his recovery capped to a percentage of benefits by statute, the attorney fees paid by Next Door were slightly less than this—$165.54.  This is an equivalent to $1.53/hour.  To put that in context, the average attorney fee is $200-$400/hour.

However, while many experts testified to the “manifest unfairness” of this award, the Florida Supreme Court didn’t make its ruling based on “unfairness.”  A lawyer is free to simply not represent a client with a case that won’t make money.  Instead, the court found the statute unconstitutional for violating due process.

Due Process in Paying What’s Due

Due process is a Constitutional right, protection against being deprived of life, liberty, or property without due process of law.  The Florida statute regarding attorney fees workers’ compensation cases required attorney fees to always match the amount provided by the formula in the statute.  There was no way a court or party could present evidence to change this amount.  The Florida Supreme Court took issue with this, stating that this made the statute violate constitutional due process as an irrebuttable presumption.

An irrebuttable presumption is where a law says that something will always be the case, regardless of any evidence to the contrary. They are generally considered constitutional no-nos.  The Florida Supreme Court said the statute stated that its formula would always produce a reasonable fee. 

However, if the goal of the statute was to standardize and prevent excessive fees, it failed. The statute also had the possibility to issue unreasonably high fees where a lawyer received huge benefits on a simple case.

As the statute didn’t actually achieve its goal, there wasn’t a reasonable basis for such an unyielding rule. In fact, the court argued the scheme created more difficulties than it solved.  When an employer or insurer can be certain that they will never be held responsible for greater attorney’s fees than the statutory amount, there is no disincentive against attempting to bury a plaintiff under numerous defenses and filings.

With the Florida Supreme Court ruling the statute unconstitutional as it was, the current statute couldn’t continue as law.

So What's Next?

Castellanos wasn’t the only case with this issue. The Florida Supreme Court noted that they had 18 other cases dealing with very similar fact patterns. Without the potential of a reasonable attorney fees award, there was nothing to stop employers from denying workers’ compensation, then drowning that employee in defenses they couldn’t hope to overcome without legal assistance.

The Florida Supreme Court’s change won’t let lawyers steal benefits out from under the nose of unsuspecting clients. Instead, it will protect those clients against employers looking to abuse the complexity of workers’ compensation claims.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

EEOC Files First Two Sexual Orientation Discrimination Cases

Ever heard of the Civil Rights Act? Of course you have; it’s one of the most important pieces of legislation in our history. It prohibits discrimination based upon race, color, religion, sex, or national origin. However, it doesn’t specifically protect from discrimination based upon sexual orientation (or transgender for that matter).

The Equal Opportunity Commission (EEOC) is the governmental entity responsible for enforcing compliance with the Civil Rights Act. Although it has not been specifically enumerated within the Act, the EEOC considers sexual orientation as a protected class and they’re taking steps forward to ensure companies can’t ignore their decision.

Lawsuits from Baltimore and Pittsburg Companies

Yolanda Boone, a former employee of Pallet Companies, alleges she was terminated after complaining of being harassed because of her sexual orientation. Boone was known to her coworkers as a lesbian and, as a result, was continually harassed by her shift supervisor Charles Lowery. According to Boone, Lowery would say things such as, “I want to turn you back into a woman, “ “Are you a girl or a man?” and often quoted biblical quotes that referenced only a man and woman should be together—not a woman and a woman. Boone says once she complained, she was asked to resign and when she refused, she was fired.  

The 2^nd suit involves a former telemarketer, Dale Baxley, for Scott Medical Health Center. Baxley’s suit alleges his manager, Robert McClendon, used antigay slurs when referring to Baxley and that McClendon, “routinely made unwelcome and offensive comments about Baxley, including but not limited to regularly calling him ‘fag,’ ‘faggot,’ and ‘queer,’ and making statements such as ‘fucking queer can’t do your job.’” These are just a few of the slurs Baxley claimed McClendon used before he resigned after the company’s president refused to do anything to stop the harassment.

Each complainant seeks punitive and compensatory damages against the companies, as well as orders from the court requiring the companies to end discrimination and take steps to prevent any future harassment.

EEOC Says Sexual Orientation is Protected under Sex Discrimination and Federal Courts Will Likely Give Significant Deference to the Commission’s Ruling

In a complaint brought by an air traffic control specialist against Transportation Secretary Anthony Foxx in Florida last year, the EEOC officially ruled, “Allegations of discrimination on the basis of sexual orientation necessarily state a claim of discrimination on the basis of sex.”

Not only does the Commission believe sexual orientation is protected, but in the 2012 case brought by Mia Macy against the Bureau of Alcohol, Tobacco, Firearms and Explosives, the EEOC declared transgender workers are protected under sex discrimination.  

While it’s ultimately up to the Supreme Court to issue any definitive decision on the issue, the EEOC believes, “The courts have gone where the principles of Title VII have directed.” Further, in the past, federal courts have typically given significant deference to the EEOC’s decisions.

It’s Only a Matter of Time

It’s been slow, but there’s been a progressive movement towards equality for the LGBT community and there’s no doubt the courts will find their way towards a decision in line with the EEOC. In 1965, the Supreme Court found, in Griswold v. Connecticut, that fundamental rights found within the 14^th Amendment’s Due Process Clause

“extend to certain personal choices central to individual dignity and autonomy, including intimate choices that define personal identity and beliefs…”

In 2003, the Supreme Court struck down a Texas law, Lawrence v. Texas, which prohibited certain forms of intimate sexual contact between members of the same sex. Justice Kennedy, in a landmark majority opinion, stated that the law attempted to:

“…control a personal relationship that…is within the liberty of persons to choose without being punished.”

Finally, in 2015, the Supreme Court ruled in favor of gay marriages, Obergefell v. Hodges, stating,

“the right to personal choice regarding marriage is inherent in the concept of individual autonomy.”

Although Obergefell dealt with marriage, their decision goes to the very core principles of individual autonomy and shouldn’t apply any different in workplace discrimination. With the historic trend of the Supreme Court rulings, it’s only a matter of time before sexual orientation and transgenders becomes legitimized as protected classes against sex-based discrimination.

Authored by Ashley Roncevic, LegalMatch Legal Writer and Attorney at Law

Oklahoma Supreme Court Says No to Workers’ Compensation Law Which Checkmates Employees

The Oklahoma courts have been methodically dismantling parts of a sweeping overhaul to workers’ compensation made in 2013. Just a few weeks back, the Oklahoma Workers’ Compensation Commission ruled that a provision of the overhaul which allowed employers to write their own workers’ compensation plan violated Oklahoma’s State Constitution. Now, in the case of Maxwell v. Sprint PCS, the Oklahoma Supreme Court has ruled that another provision of the 2013 workers’ compensation changes tramples the Due Process Clause of both the Oklahoma State Constitution and the Constitution of the United States of America.            

Permanent Partial Disability in Oklahoma: Damned if You Do; Damned if You Don’t

The section of law that the Oklahoma Supreme Court found to have so grievously violated the constitutional rights of employees was a provision allowing employers to defer payment of workers’ compensation in cases of permanent partial disability (PPD) where an employee returns to their pre-injury job.  A PPD is where an employee permanently loses some, but not all, function in a body part due to a workplace injury.

Under the Oklahoma deferral rule, when an injured employee—having healed their injury as much as possible—returns to the position they held before their injury, or an equivalent job, their workers’ compensation payments were put on hold. While they worked at their old job, the amount owed to them for workers’ compensation decreased by 70% of their average weekly wage every week.  Under Oklahoma’s 2013 workers’ compensation scheme, an injured worker receives 70% of their average weekly wage (with some limitations) over a statutorily determined number of weeks based on where they were injured.  This means that every week an employee worked at their old job they essentially lost one week of workers’ compensation.

If the injured employee refused to return to work, their workers’ compensation was deferred in the same manner. So no matter what an employee did, once their employer offers them their job back, they stopped receiving workers’ compensation.

On its face, the rule already seems wrong. An employer could hire back a seriously injured employee, just to arbitrarily fire them once their workers’ compensation runs out.  In fact, this is exactly what happened to one of the employees in the case that led the Oklahoma Supreme Court to rule the deferral scheme unconstitutional.  If the employee doesn’t want to go back, they still don’t get their workers’ compensation. However, it wasn’t what the rule did that ultimately led the Oklahoma Supreme Court to rule it unconstitutional - it was how they did it. 

Why is it Unconstitutional?

The Due Process Clause prevents the government from depriving a person of life, liberty, or property without due process of law.  There are two types of due process, substantive and procedural. Substantive due process deals with the government regulation taking away a fundamental right. Procedural due process deals with the right to have the opportunity to make your case for yourself before the government takes away your life, liberty or property.

The Oklahoma Supreme Court ruled that the deferral provisions violated workers’ right to procedural due process. Workers have a property interest in an award of workers’ compensation. This means they receive due process protections before those workers’ compensation benefits can be taken away from them.  As part of the protections of due process, Oklahoma due process requires that “all parties must be apprised of the charges so they may test, explain or rebut it. They must be given an opportunity to cross-examine witnesses and to present evidence." 

This was an opportunity not given to workers seeking a hearing on their deferral. When a worker asked for a hearing upon returning to work, their employer was allowed to show any evidence they wanted at that hearing while the worker was only allowed to show medical evidence. The only evidence considered at these hearings was whether the worker had in fact returned to work.

The Court ruled that this meant that the hearings presumed that an injured worker has no loss of wage earning capacity because they have returned to work earning the wages they made before their injury. However, this presumption doesn’t take into account the loss of work life or future job opportunities from the injury.  Thus, the hearings denied injured workers the chance to present “evidence of loss of wage-earning capacity [which] could include the injured employee's age, education, work history, vocational training, transferable skills, job opportunities, fitness to perform certain jobs, wage levels, or other information relating to his or her employment situation.” By not allowing employees to present all their evidence at these hearings, the procedures of the deferral provisions denied those employees due process.

The Future of Oklahoma Workers’ Compensation

The decision in Maxwell v. Sprint was a 7-2 decision on the part of the Oklahoma Supreme Court. Two separate judges included concurring opinions arguing that the opinion of the rest of the judges didn’t go far enough in just saying that the deferral provision “trampled” constitutional rights. 

The 2013 changes to Oklahoma’s workers’ compensation system were employer-friendly to say the least—reducing potential awards for employees nearly across the board. Being employer-friendly is not by itself a bad thing, but with two separate provisions of the changes already found unconstitutional, it calls into question the changes as a whole. Time will tell whether Oklahoma will need to make further changes to its workers’ compensation law in order to protect workers in the state.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

Tyson Broken by Records: The Supreme Court’s Ruling Against Tyson Foods

The Supreme Court recently upheld a whopping $2.9M dollar judgment in a class action lawsuit against Tyson Foods brought by its current and former employees. Law nerds, such as myself, anticipated the potential that this case might create a rule narrowing the circumstances in which employees could bring a class action lawsuit against their employer.  Instead, the Supreme Court strengthened existing rules on wage-an-hour law (how an employer has to pay their employees) and maintaining records.  This means that it’s more important than ever that both employees and employers understand how this law works in order to either protect your rights or protect your neck from Tyson’s fate.

The Tyson Case

Tyson Food was originally sued by its employees for not paying them for the time it took to take on and off protective gear necessary for their positions. In 1998, Tyson had been ordered by a court to start paying for this time spent donning and doffing protective gear. While Tyson complied at first, they stopped paying for the time spent on protective gear in 2007—instead only paying select employees for time spent with gear. At the time of the suit, Tyson paid its workers on a “gang-time” system.  Under this system, Tyson paid only for time employees were at their work stations and the production line was moving.

Tyson’s employees, unsatisfied with this development, formed a class action lawsuit to get the unpaid overtime resulting from Tyson’s failure to pay for time spent dealing with gear. The employees won in the first go round to the tune of $2.9M (less than half of the $6.7M they were asking for), then they won again on Tyson’s appeal to U.S. Eighth Circuit Court of Appeals. Tyson, having lost twice, went to the Supreme Court arguing that the employees shouldn’t have been allowed to sue as a class and that there was no way to figure out which employees should receive damages. 

Lawsuits with Class

In order to understand Tyson’s first complaint, it’s important to first understand how class action lawsuits work. In simplest terms, class actions are lawsuits brought by a group of people who’ve suffered the same or similar injury. One of the common examples is, as here, employees suing their employer over a policy that affected all of them. 

Employment lawsuits can form a collective action under the rules of the Fair Labor Standards Act (FLSA), a class action under Federal Rules of Civil Procedure 23, or both.  The biggest difference between the two is how you become a member of the suit.  A collective action requires each member of the suit to opt into the suit.  A Rule 23 class action includes all unnamed members who fall within the class definition unless they opt out.  In Tyson case, the employees collective action had 444 members while the Rule 23 class action lawsuit had 3,344.

Tyson argued to the Supreme Court that neither the collective action nor the class action were properly certified (told that they were proper class action suits) because the employees didn’t spend the same amount of time dealing with protective gear. They said that this means that the employees didn’t have a common complaint. 

Tyson had good reason to think that the Supreme Court would back them up on this argument. Just a few years back the Supreme Court ruled in favor of Walmart in a class action employment discrimination case—saying the 1.5M class members didn’t have similar enough situations to be certified as a class.

However, much to Tyson’s chagrin, the Supreme Court didn’t think this case was similar to the Walmart case. Tyson’s fatal flaw?  They never kept any records of the time their employees spent changing into and out of their gear.

The FLSA and Proper Records in Wage an Hour Cases

The Supreme Court rejected Tyson’s argument based on the rules of the FLSA. The FLSA is a body of federal law which sets rules for, among other things, minimum wage, overtime pay, and recordkeeping requirements.

The FLSA requires employers to pay for activities integral and indispensable to regular work, even if these activities don’t occur at the employee’s workstation. It also requires employers to keep accurate records of the hours their employees work as well as wages earned.  These recordkeeping requirements can become more involved from state to state, and even the FLSA has some more specific requirements.

Where an employer fails to keep proper records, employees can rely on representative evidence to establish the hours they’ve worked. This evidence only needs to be sufficient for a reasonable inference that the employees’ evidence is an appropriate approximation of the hours they worked.  For this reason, it is incredibly important for an employer to keep legally compliant records. 

Tyson kept no records whatsoever of the time their employees spent changing in and out of protective gear. For this reason, Tyson’s employees were able to rely on the evidence of an expert to determine the average time it took to deal with the protective gear and calculate unpaid overtime based on this average.  The Supreme Court found that Tyson’s employees, working at the same facility and affected by the same policy, were similarly situated in that they could all have introduced the same expert study to establish the hours they weren’t paid for.  This is as opposed to the Walmart case, where each instance of alleged discrimination arose from a different set of facts and had a different effect.

Implications of the Supreme Court’s Decision

Tyson’s second argument, that the class included members who had no right damages, led the Supreme Court to send the case back down to the district court to figure out how to allocate the $2.9M.

However, the Supreme Court’s first ruling still means that where an employer doesn’t keep records, they are opening themselves up to even more liability than they could have expected. For employees, this makes a cheaper means of litigating their rights more available.  For employers, it means that improper records may be open the door to an easily certified class action lawsuit against them—just like Tyson. It’s worth it for employers to seek out an employment lawyer to ensure their records don’t leave them vulnerable to this situation—as Tyson found out.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

The EEOC Taking Strides for LGBT Workers

Providing a workplace free from discrimination has been an ongoing issue for over a century and a half.  Congress passed laws barring workplace discrimination as far back as the Civil Rights Act of 1866—a set of laws barring racial discrimination in the workplace which were promptly neutered by a subsequent Supreme Court ruling.

Since then, both State and Federal governments have passed laws to help ensure equality in the work place. Federal law has done this, in part, through Title VII of the Civil Rights Act of 1964.  Title VII forbids employers from discriminating against employees on the basis of race, gender, national origin, color or religion.  It also prevents employers from retaliating, through termination or otherwise, against employees who report such discrimination. 

Extending this protection against discrimination in the workplace to the LGBT community has, unfortunately, been an uphill battle. Just this week, North Carolina convened an emergency session of their general assembly in order to pass a law preempting cities from enacting ordinances from including LGBT persons in their anti-discrimination standards.  This law came in direct response to a Charlotte ordinance banning discrimination against LGBT persons which was passed in February of this year.

22 states have passed laws which add protection against discrimination based on either sexual orientation, gender identity, or both. However, no federal appeals court has ever explicitly ruled that Title VII prevents employers from discriminating on the basis of either sexual orientation or gender identity.  The U.S. Equal Employment Opportunity Commission, or the EEOC, is looking to change that.

The EEOC is a federal agency tasked with enforcing Title VII and other federal workplace discrimination laws.  For the last several year,s they have been working to advance the cause of LGBT people in the workplace.  In July 2013, the EEOC declared as an agency that sexual orientation was a protected class as a form of sex-based discrimination.  Since then, they have been investigating claims of discrimination based on gender identity or sexual orientation. Recently, the EEOC has brought two separate federal lawsuits alleging discrimination against homosexual employees on the basis of their sexual orientation.

The Cases Brought by the EEOC

The two cases brought by the EEOC both allege a pattern of discriminatory harassment against an employee due to their sexual orientation.

The first lawsuit is against Scott Medical Health Center on behalf of Dale Baxley. Mr. Baxley alleges the he quit due to repeated harassment from his supervisor about his sexual orientation.  Mr. Baxley’s supervisor repeatedly called him by derogatory slurs for a homosexual man during Mr. Baxley’s shifts.  His supervisor also made derogatory comments about Mr. Baxley’s relationship with his fiancé, including asking “who’s the butch and who is the bitch.” Mr. Baxley complained about the treatment, but after no action was taken he resigned.

The EEOC’s second lawsuit is on behalf of Yolanda Boone, a lesbian woman, and is against Pallet Companies. Ms. Boone also alleges that her supervisor repeatedly harassed her, making bigoted comments such as “I want to turn you back into a woman.” After Ms. Boone complained about the harassment, she was asked to resign. When she refused to do so, she was fired.

In both cases, the EEOC argument is the same. They argue that sex-based discrimination, a protected class under Title VII which protects both men and women, includes discrimination against someone for not conforming to traditional gender stereotypes or norms.  Title VII’s prohibition of sex discrimination means that employers may not rely upon sex-based considerations or take gender into account when making employment decisions. The EEOC argues that the definition of sex discrimination has evolved over time and that where employers make employment decisions based on sex stereotypes or gender norms, this is a sex-based employment decision.  They argue that Mr. Baxley and Ms. Boone’s supervisors’ objections to homosexual persons comes from just such gender stereotypes.

Why Sexual Orientation and Gender Identity Should Be Protected Classes

The EEOC raises persuasive arguments as to why sexual orientation should be considered a protected class under the classification of sex-based discrimination. These same arguments support protecting employees from discrimination based on their gender identity. 

In order to move beyond classifying sexual orientation and gender identity as sex-based discrimination, there would need to be a Congressional Act adding both to the list of protected classes in Title VII. As it stands, a bill of this nature is extremely unlikely to make its way through Congress.  However, both sexual orientation and gender identity should qualify as protected classes based on the legal justifications provided for declaring other groups as protected classes.

Courts have historically looked at three elements when forming a new protected class: (1) a long history of discrimination, (2) economic disadvantages, and (3) immutable characteristics. Both sexual orientation and gender identity unarguably qualify on the first two elements.  The LGBT community has faced discrimination (economic and otherwise) and hate crimes since the U.S. became an independent nation.  After the American Revolution, same-sex relationships were a felony in the United States.  Currently, 68% of LGBT persons report discrimination in employment and 16% of all reported hate crimes are committed against LGBT persons.  This same discrimination in the workplace shows the economic disadvantages the LGBT community faces. 

Some argue that orientation or gender identity are not immutable, despite substantial evidence to the contrary. Studies on the issue have found that sexual orientation and gender identity are either genetic, or influenced by both genetics, hormones, and environmental influences.  Either way, sexual orientation and gender identity are not something chosen like a passing fad, but fundamental parts of what makes up a human being.  They are certainly more immutable than a person’s religion, which Title VII already treats as a protected class—even covering some white supremacist groups.

The lack of federal protection against employment discrimination allow people like Dale Baxley and Yolanda Boone to be treated as sub-humans in the workplace. Sexual orientation and gender identity both easily pass the test for a protected class. The EEOC is taking steps to help further the cause, but it is time to extend the protections of Title VII to the LGBT community.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

Opting Out: Should Employers Be Allowed to Write Their Own Workers’ Compensation Plans?

If you were told that your employer could choose whether to give you lunch breaks, you’d probably not expect many lunch breaks. However, in Texas and Oklahoma, the states have allowed employers to decide whether or not to participate in workers’ compensation.

Workers’ compensation is a set of laws which employers are required to abide by in nearly every state. Often called “The Grand Bargain,” workers’ compensation limits liability to employers by allowing employees to forgo their right to sue their employer and providing caps to employer liability in return for medical benefits and wage-replacement. These benefits are given on a no-fault basis and can last indefinitely. 

In other words, if you’re injured and it’s your fault, you can still receive benefits for the rest of your life if necessary. These benefits are paid by the employer. The idea behind this system is that employers gain protection from being sued while employees get benefits without having to go through a long and costly legal battle. The workers’ compensation claims are handled by state government departments.

For decades, Texas has followed an opt-out approach to workers’ compensation. Texas employers allow employers to choose whether or not they want to participate in the state’s workers’ compensation program. In February 2014, Oklahoma began allowing companies to opt-out of workers’ compensation as well. Instead, employers may write their own opt-out workers’ compensation plans or purchase liability insurance.

Employer opt-out plans have recently come under attack by news sources such as NPR and Propublica. What’s more, the Oklahoma Workers’ Compensation Commission has unanimously ruled that the opt-out plans violate their State Constitution. The U.S. Department of Labor has even begun an investigation to determine whether these opt-out laws violate federal law.

Despite all this, proponents of these opt-out plans argue that they are better for both employer and employee alike. So what are the arguments for and against these programs?

The Arguments for Opt-Out Plans

Proponents of opt-out plans argue that the plans substantially lower the cost of doing business. The savings are reported to be as high as 40-90% over conventional workers’ compensation.  They say that this allows businesses to create more jobs and alleviates the need to “get hung up on squeezing an employee.” In other words, the plans allow companies to be more generous with individual employees. Supporters of the plans also argue that by forgoing the liability protections of workers’ compensation, the threat of lawsuits prevents companies from mistreating employees.

The Dangers of the Opt-Out Plans for Employees

While proponents may argue that opt-out plans can be more individually generous for employees, the opposite has proved to be true in almost every aspect of the plans.

Opt-out plans generally let companies decide what constitutes a workplace injury and thus easily deny claims. The plans also fail to cover a laundry list of items that are normally covered by workers’ compensation plans, such as asbestos exposure and wheelchair vans. While workers’ compensation normally provides benefits for as long as the injury persists, the majority of Texas opt-out plans limit benefits to two-years after an injury or death of an employee.   

Although it varies state to state, workers’ compensation normally provides between 2 and 30 days for an employee to report an injury. Opt-out plans often require employees to report within 24 hours or before the end of their shift or have their benefits denied. In one instance, an employee was denied for calling 27 hours after an accident. Another was denied benefits because they did not feel the effects of their accident until after their shift.

Normally, a denied workers’ compensation claim has several avenues for appeal. Opt-out plans only allow appeal through your employer.

Threat of Lawsuits Ensuring Better Plans?

Employers’ opt-out plans do not offer equivalent benefits to state-mandated workers’ compensation. However, the threat of lawsuits could potentially leave employers more safety conscious, balancing out the downsides of the opt-out plans.  Unfortunately, it is unlikely that this will be the case as employers choosing to opt-out haven’t exactly been under substantial pressure from lawsuits. 

A 2010 Stanford study revealed that 81% of employers saw little to no increase in litigation against them as a result of their choice to opt out of workers’ compensation. There are several explanations for these findings.  First, 85% of employers’ opt-out plans require employees to arbitrate rather than sue. Arbitration generally leads to much lower payouts from employers.  Another explanation for employers seeing so few lawsuits is mandatory settlement clauses in the majority of employers’ opt-out plans. These clauses state that if an employee turns down whatever offer their employer makes, they will never receive benefits of any kind.

Opt-Out Plans Shifting Costs

It is likely that the dangers of increased liability are sufficiently counteracted by the potential benefits to employers. However, how do these benefits to employers translate to the average taxpayer?

Those who slip through the cracks for workers’ compensation often end up relying on government disability benefits. As an example, 7% of new SSDI beneficiaries in New Mexico in 2010 were due to workplace injuries.  If extrapolated to the rest of the country, this costs taxpayers $12B annually. These opt-out systems will leave many more employees unable to work with no access to workers’ compensation other than government disability benefits.

Thus, instead of employers paying for the costs of workplace accidents, these costs are spread across taxpayers. Ensuring a safety net for those who are rendered unable to work is important; however, allowing employers to shift their own costs to taxpayers is a bad policy. No matter how these opt-out plans are implemented, their cost will be borne by the entirety of the public.

There is little question that these opt-out plans will reduce costs to employers. These reduced costs may even lead to more available jobs. However, the cost to employees and the public at large is simply too great. Allowing employers to opt out of responsibility is not a reasonable option.  

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

New Mexico’s Intoxicated Employees Law: Common Sense or Employer Loophole?

Does an employee who is injured while drunk or high deserve full workers’ compensation benefits?  New Mexico recently passed S.B. 214, a law which addresses this very issue—limiting worker's compensation to employees who are found to be intoxicated. 

If an employer has a written policy barring alcohol and drug use at work and a post-incident test (at the employer’s expense) reveals that the employee was intoxicated during the incident, S.B. 214 reduces that employee’s benefits by 10-90%. The exact amount of the reduction is based on how much the employee’s intoxication contributes to the incident leading to injury or death. Where a worker refuses to submit to a test after an incident, they are denied all workers’ compensation benefits under the law. This law works in addition to an overarching rule that states where an employee’s intoxication is the actual cause of their injury, they receive no benefits whatsoever.

When asked about signing the law, the Governor of New Mexico said, “If an employee is drunk or high on the job, they shouldn't be rewarded with full workers compensation benefits when they injure themselves…It’s a matter of common sense, and that's why I'm signing this legislation.”  At first glance, the law does seems like common sense.  If somebody chooses to show up to work drunk or high and it leads to an accident, or even contributes to one, it hardly seems fair to hold an employer fully responsible for the results of that person’s poor judgment.  The law even takes into account prescription drugs, excluding their effects from the definition of intoxication so as to avoid penalizing workers for their medical conditions. 

However, the provisions of the law creating a minimum reduction in benefits offer an exploitable loophole for negligent employers.

S.B. 214’s History of Rejection

S.B. 214 replaces New Mexico’s previous approach to reducing workers’ compensation for intoxicated employees whose intoxication is not the cause of their injury. The old law simply applies a flat 10% reduction in benefits for anybody found to be voluntarily intoxicated at the time of their accident. 

The most common concerns raised by opponents to the change have been the increased litigation and the burden to families of intoxicated workers who receive no workers’ compensation or medical benefits. The concern of increased litigation is a real one. It is unlikely that employers will not test every employee in an accident to see if they are intoxicated when doing so has the potential to decrease their liability. Every time that there is an intoxicated employee involved in an accident, there will need to be a full analysis of the facts to determine exactly how much that intoxication impacted the accident. This is a much more involved process than simply determining whether the inebriation actually caused the accident.

S.B. 214 does make efforts to address the concern of burdening the families of deceased or injured intoxicated workers. The law states that intoxication cannot reduce medical benefits of a deceased worker's dependents. This serves to alleviate much of the potential burden on families, but not all of it. Workers’ compensation supports those with workplace injuries that keep them from working, as there is no way to reduce these benefits without putting some strain on those who would rely on that injured worker’s income. Many workers’ compensation systems, including New Mexico’s, are no-fault systems. This means that employees receive benefits even if a workplace accident is their own fault. S.B 214 represents a departure from this underlying tenet in the case of intoxicated workers.

Minimum Reductions: 10% Off For Unsafe Employers

Despite these concerns, there is a reasonable argument behind S.B. 214—where the intoxication of an employee is not the actual cause of their injury, but still contributes, an employer should not be held fully responsible. However, there is no explanation behind requiring a 10% minimum reduction in benefits—regardless of an employee’s actual level of culpability.  By deciding to enact a law that requires a full factual analysis of every situation to determine level of culpability, New Mexico has declared that they consider the additional time spent on litigation for this analysis to be worthwhile.  So why not allow an analysis determining culpability for 0-100%? The only real reason seems to be that S.B 214 is piggybacking off the very law it seeks to replace. 

Employees should not show up to work under the influence of alcohol or drugs. Reducing workers’ compensation to intoxicated employees based on how much their inebriation contributes to an accident is not without basis. That being said, giving what amounts to a 10% discount to an employer who is entirely at fault for injuring their employee is bad policy-making.

Whatever they choose to do going forward, New Mexico’s new law has the potential for an improvement over their previous flat 10% reduction to benefits. However, the arbitrary minimum reduction to benefits must be addressed before employers can use it as a convenient loophole to being held fully accountable for their negligent actions.

Authored by Jonathan Lurie, LegalMatch Legal Writer and Attorney at Law

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