Women in Labor

A recent claim of pregnancy discrimination by a Connecticut employee provides employers with a useful reminder about their legal obligations to pregnant workers.

Amy Zvovushe alleges that when she requested a pregnancy leave from her employer, she was told that since she was ineligible for Family Medical Leave Act leave (Ms. Zvovushe had not been with her employer for the requisite 12 months), her taking of unapproved time off would be considered a “voluntary resignation.” However, after being contacted by Ms. Zvovushe’s attorney, her employer changed course and provided Ms. Zvovushe with the requested leave. Ms. Zvovushe later filed discrimination claims with the Connecticut Commission on Human Rights and Opportunities and the Equal Employment Opportunity Commission (EEOC).

Under federal law, pregnant workers must be treated like all other workers. The Pregnancy Discrimination Act (PDA) requires that pregnant workers be allowed to perform their usual duties and to work as long as they are able to perform their jobs. Additionally, if a pregnant worker requires an accommodation, employers must treat this request like any other request for time off due to a temporary disability. Therefore, whatever an employer would offer a temporarily disabled employee –modification of work duties, paid leave, or unpaid leave – it must offer the same benefits to pregnant workers.

(Note: the EEOC does not consider pregnancy a “disability” for purposes of the Americans with Disabilities Act, but pregnancy-related conditions may be considered disabilities).

State laws often provide additional protections to pregnant workers. Connecticut law makes it illegal “[t]o terminate a woman’s employment because of her pregnancy” and “to refuse to grant to [a pregnant] employee a reasonable leave of absence for disability resulting from her pregnancy.” Massachusetts law provides that full-time employees who have completed at least three months of work or an employer’s initial probationary period (with an employer that has 6 or more employees) are entitled to an unpaid eight-week maternity leave.

Employers, however, are generally not required to offer pregnant employees over and above what they would offer other employees. Thus, employers are not obligated to establish maternity leave policies or provide time off when they would not provide this time off to workers with other temporary disabilities. However, this must be the employer’s actual practice and not just official company policy. (see our post from a few months ago on the importance of uniform enforcement of company policies).

The Massachusetts Joint Committee on Labor and Workforce Development has announced the creation of a working group on independent contractors and employee misclassification. The working group contends that these laws have produced confusion and unintended consequences. Specifically, according to a press release, “[t]he 2004 [independent contractor] law has brought unintended consequences to a diverse group of professions, including accountants, artists, couriers, financial planners, graphic designers, publishers, realtors and others.”

The working group has met twice and plans to meet several more times in the coming weeks. The group is led by the Vice Chairs of the Joint Committee on Labor and Workforce Development, Senator Michael J. Rodrigues and Representative Lori A. Ehrlich. The group has already received oral testimony and hopes to develop a proposal in the coming months.

The working group welcomes written comments from employers or other interested parties who have opinions on the current state of Massachusetts’ independent contractor law and/or issues of employee misclassification. Written comments may be submitted to Jeremy Spittle, Legislative and Budget Director for Senator Rodrigues (jeremy.spittle@masenate.gov) or Representative Ehrlich (Lori.Ehrlich@mahouse.gov) by e-mail, or at the below addresses:

Lori A. Ehrlich
State Representative
8th Essex District
State House, Room 39
Boston, MA 02133

Michael J. Rodrigues
State Senator
Somerset Town Hall
140 Wood Street
Somerset, MA 02726

We will keep you posted on any further developments.

In a significant decision, the National Labor Relations Board (NLRB or Board) held in D. R. Horton, Inc. (357 NLRB No. 184) that a mandatory waiver of class action and class arbitration proceedings violates the National Labor Relations Act (NLRA). This ruling applies to all employers subject to the NLRA (which includes most private employers).

The Company D. R. Horton included in its employment contracts a “Mutual Arbitration Agreement” (MAA). This agreement provided that “all disputes and claims relating to the employee’s employment” would be settled by individual arbitration. Judicial complaints of any kind, in addition to class arbitration, were explicitly prohibited.

A class of superintendents at D. R. Horton believed that they had been misclassified as exempt under the Fair Labor Standards Act (FLSA). An attorney representing this class wrote to D. R. Horton, indicating his intent to initiate class arbitration. D. R. Horton refused, citing the terms of the MAA, and one Michael Cuda (the named representative of the class) filed an Unfair Labor Practice charge with the NLRB.

The Board held that the Agreement’s wholesale waiver of class procedures conflicted with the NLRA, as an employee’s filing of a class action lawsuit or class arbitration is a form of protected activity. Therefore, the MAA’s “categorical prohibition of joint, class, or collective federal state or employment law claims in any forum” infringed upon employees’ right to engage in concerted activity.

In order to reach this conclusion, the Board had to distinguish several laws and Supreme Court opinions. First, the Board distinguished this situation from cases holding that unions may permissibly waive employees’ rights to bring individual employment claims (such as a claim under the FLSA) in court by indicating that the issue in those cases was whether a union may properly waive such claims, not whether an employer may “impose [ ]” a provision “on individual employees . . . as a condition of employment.”

The Board also considered the effect of the Federal Arbitration Act (FAA), a federal law indicating that arbitration agreements must be enforced. The Board argued that an equitable exception to the FAA, public policy, applied here. Specifically, the Board argued that the MAA violated the public policy of protected concerted activity as embodied in the NLRA.

The Board also distinguished AT&T Mobile v. Concepcion, a recent U.S. Supreme Court case holding that California’s refusal to enforce mandatory class arbitration waivers under state law conflicted with the FAA. The Board said that Concepcion’s endorsement of class arbitration waivers was based on the fact that potential claims could encompass tens of thousands of consumers. In the employment context, however, employer-imposed waivers would only cover an employer’s actual employees, a much smaller number on average (the nationwide average is 20). Also, any class claims would likely only encompass a subset of all employees.

At the end of its opinion, the Board indicated that its real concern was not the MAA’s arbitration provision, but its waiver of all collective actions. Specifically, the Board stated that “[e]mployers remain free to insist that arbitral proceedings be conducted on an individual basis . . . [s]o long as the[y] . . . leave [ ] open a judicial forum for class and collective claims.”

It is clear, then, that class arbitration waivers are permissible, but not waivers of all class action proceedings. Employers that utilize arbitration and/or class action waivers are encouraged to review their agreements to ensure that they comply with the D. R. Horton opinion.

A section of Massachusetts’ Identity Theft Regulations (201 CMR 17.03) will go into effect on March 1, 2012. This section requires that businesses that retain third-party vendors such as payroll administrators or document disposal companies include in their contracts a requirement that the third-party service provider will “implement and maintain appropriate security measures for personal information.” These appropriate safeguards include, among other things, maintaining a comprehensive written plan for keeping personal information secure, identifying risks, and designating one or more employees to oversee the plan. The prior version of the regulation only required that businesses take “reasonable steps” to select and retain third-party providers with adequate safeguards. Businesses should ensure that existing and future contracts with third-party vendors contain such a provision before March 1, 2012.

As previously reported on this blog, Massachusetts’ Identity Theft Law and Regulations require the implementation and maintenance of an information security program. This program must be in writing and must outline various steps the business will take to protect personal information, whether that information is stored electronically or in paper documents. The regulations require numerous specific provisions that must be included in the program, such as a secure method of assigning and selecting passwords; encryption of all data containing personal information that is transmitted wirelessly or across public networks; and maintaining reasonably up-to-date firewall and malware protection. Additionally, businesses must conduct an annual review of their security measures and educate employees who handle personal information about their role in protecting this information.

Royal LLP continues to conduct seminars detailing businesses’ obligations under the identity theft regulations as well as seminars relative to other employment law topics. Please check our website for upcoming seminars at: http://www.royalllp.com/upcomingseminars.html.

For the first time since August 2010, the National Labor Relations Board (NLRB or Board) is fully staffed with five members. The Board has had either two or three members for most of the past two years as the result of political gridlock. President Obama recess appointed three members following the expiration of Member Craig Becker’s recess appointment a few weeks ago. This procedure allowed the administration to side step the Senate confirmation process, a contentious move that has drawn criticism.

The three new members are: (1) Sharon Block, former Deputy Assistant Secretary for Congressional Affairs at the U.S. Department of Labor and Senior Labor and Employment Counsel for the Senate HELP Committee; (2) Terence F. Flynn, previous Chief Counsel to former NLRB Board Member Peter Schaumber; and (3) Richard Griffin, former General Counsel for the International Union of Operating Engineers.

The NLRB is now fully empowered to render decisions in cases that come before it. This was not possible just a few weeks ago when the Board’s membership dipped to two members following the expiration of Member Becker’s term (a two-member Board was deemed incapable of rendering decisions by the U.S. Supreme Court in the 2010 case of NLRB v. New Process Steel).

The NLRB has been very active as of late, and this will likely continue with the restoration of five members to the Board.

A recent workplace shooting in California provides a sobering reminder that employers must be aware of the risks of workplace violence and take affirmative steps to prevent it from occurring.

The U.S. Occupational Safety and Health Administration (OSHA) defines workplace violence as: “any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at [a] work site.” Workplace violence takes a number of forms and covers a wide range of activities.

One of the first things employers should do is assess their workplace to determine whether there are unique risks of violence in their particular workplace: do any employees work alone? Do employees interact, or are they likely to interact, with unstable clients or customers? Are any work facilities located in a dangerous area? These questions can help you formulate an effective strategy for keeping your employees safe.

Additionally, there are several actions that employers can take to prevent workplace violence. One is to maintain a zero-tolerance workplace violence policy. This policy should inform employees that any and all workplace violence is unacceptable and will be punished. As OSHA recommends, the policy should be broad and cover “all workers, patients, clients, visitors, contractors, and anyone else who may come in contact with company personnel.” The policy should also include an internal process for filing and investigating complaints.

Also, consider conducting training programs for your managers in recognizing, mitigating, and dealing with workplace violence issues. And, if financially feasible, employers may want to consider offering an employee assistance program (a service that offers telephone support for workers facing personal or work-related issues) and/or a voluntary wellness program (a program that provides incentives to live and eat healthy) to employees.

Although workplace violence is often unpredictable, there are steps that you can take now to keep you and your employees safe.

Connecticut’s law requiring certain employers to provide mandatory sick leave to service workers, discussed on this blog in July, went into effect on January 1, 2012. The law requires most employers with 50 or more employees to offer paid sick leave to “service workers.” An employer is considered: “any person, firm, business, educational institution, nonprofit agency, corporation, limited liability company or other entity,” with two exceptions: (1) “business establishment[s] classified in sector 31, 32, or 33 in the North American Industrial Classification System (i.e. manufacturers – click here for more information); and (2) “nationally chartered organization[s] exempt from taxation under Section 501(c)(3) of the [IRS Code].” “Service workers” are defined as a broad range of occupational classifications, including food service, medical and health, social work, human service, retail, administrative and transportation.

Under the law, service workers will accrue paid sick leave at the rate of 1 hour for every 40 hours worked. The maximum amount of paid sick leave a service worker can accumulate is 40 hours. Service workers may carry this time over from the current year to the next year, but they cannot use more than 40 hours of paid sick leave per year. Employers do not have to provide this leave if they offer “any other paid leave, or combination of paid leave” that can be used to accommodate medical leave (as formulated in Section 3 of the act) that accrues at the same, or a greater, rate than the 1 hour for every 40 hours worked ratio.

Employers subject to the law must inform employees of their rights under the law at the time of hire. This can be accomplished in writing, or by placing a poster in a “conspicuous place, accessible to service workers, at the employer’s place of business that contains the information required by this [law] in both English and Spanish.” Employers can face significant monetary penalties for retaliating against employees who exercise their rights under this law. The full text of the law may be viewed here. Employers with any questions are encouraged to contact legal counsel.

The NLRB has again postponed the implementation date for its new poster rule. The compliance date is now set for April 30, 2012. The Board pushed the date back in response to a legal challenge to the rule filed in federal court.

As this blog reported in October, the poster can be obtained at the NLRB’s main and regional offices or downloaded from the Board’s website. The poster must measure at least 11 x 17 inches and be posted in a conspicuous place. Please consult our previous posts on October 5, 2011 and Aug. 25, 2011 for more information on the rule, and keep reading this blog for further updates.

Happy Holidays to all our readers!

Late yesterday, President Obama announced his attention to nominate Sharon Block and Richard Griffin for positions on the National Labor Relations Board (NLRB). Below are brief biographies of the nominees from the NLRB’s press announcement:

Sharon Block is the Deputy Assistant Secretary for Congressional Affairs at the U.S. Department of Labor. Between 2006 and 2009, Ms. Block was Senior Labor and Employment Counsel for the Senate HELP Committee, where she worked for Senator Edward M. Kennedy. Ms. Block previously served at the National Labor Relations Board as senior attorney to Chairman Robert Battista from 2003 to 2006 and as an attorney in the appellate court branch from 1996 to 2003. From 1994 to 1996, she was Assistant General Counsel at the National Endowment for the Humanities, and from 1991 to 1993, she was an associate at Steptoe & Johnson. She received a B.A. in History from Columbia University and a J.D. from Georgetown University Law Center where she received the John F. Kennedy Labor Law Award.

Richard Griffin is the General Counsel for International Union of Operating Engineers (IUOE). He also serves on the board of directors for the AFL-CIO Lawyers Coordinating Committee, a position he has held since 1994. Since 1983, he has held a number of leadership positions with IUOE from Assistant House Counsel to Associate General Counsel. From 1985 to 1994, Mr. Griffin served as a member of the board of trustees of the IUOE’s central pension fund. From 1981 to 1983, he served as a Counsel to NLRB Board Members. Mr. Griffin holds a B.A. from Yale University and a J.D. from Northeastern University School of Law.

This announcement comes at a crucial time, as the Board will drop down to two members as of Dec. 31, 2012 when Member Craig Becker’s temporary term appointment expires (Member Becker’s nomination to be appointed as a full-fledged member of the Board is pending before Congress). This will render the Board incapable of issuing binding decisions under the U.S. Supreme Court’s opinion in New Process Steel v. NLRB (2010). Under ideal conditions, the Board is supposed to have five members.

Given the lukewarm reception afforded recent NLRB proposals, it is unlikely that Congress will leap to confirm either nominee. This blog will keep you updated if and when Congress decides to act.

The Department of Labor has proposed a rule that would limit the exemptions currently afforded companions for the aged and infirm and live-in care workers under the Fair Labor Standards Act (FLSA). This means that many more of the nation’s home health care workers would be entitled to the FLSA’s minimum wage and overtime provisions.

The FLSA requires employers to pay a minimum wage and overtime to certain covered employees. Domestic service workers – including housekeepers, janitors and maids – were added to the FLSA’s list of covered categories in a 1974 amendment. This amendment also created exemptions for (1) casual babysitters and companions for the aged and infirm (from the minimum wage and overtime requirements) and (2) live-in domestic workers (only from overtime).

The home health care industry has grown immensely since 1974. For example, the number of Medicare-certified home care agencies increased from 2,242 in 1975 to 9,284 by 2007. Also, the number of for-profit agencies offering home health care services not associated with a hospital or similar facility increased from 47 in 1975 to 4,919 in 2006. The original exemptions for companions and live-in domestic workers were issued when the home health care industry was in its infancy. Given the industry’s tremendous growth, the Department of Labor has determined that the exemption now captures too many workers.

Specifically, the proposed rule would: (1) revise the definitions of “domestic service employment” and “companionship services”; (2) clarify the type of activities and duties that may be considered “incidental” to the provision of companionship services; (3) amend the record-keeping requirements for live-in domestic workers; and (4) amend the regulation pertaining to employment by a third party of companions and live-in domestic workers. This would continue to allow an individual, family, or household employing a worker’s services to apply the companionship and live-in exemptions, but would prohibit third party employers from taking advantage of the exemptions.

The rule has not yet been officially published in the Federal Register. Once it is published, it will be subject to a notice and comment period where interested parties may submit written comments about the rule at www.regulations.gov. We will update you as more information becomes available.