Category Archives: Employer Rights

Worshiping both God and the Almighty Dollar

Last month we told you about corporations being able to sue if they were victims of race discrimination.  This month, we learned of a case out of Michigan holding that corporations can claim “sincere religious beliefs” that justify discriminating against transgender employees.

In EEOC v. R.G. & G.R. Harris Funeral Home, a federal judge ruled that the Religious Freedom Restoration Act (RFRA) empowers a for-profit corporation to terminate an employee for transitioning from a man into a woman. According to the court, the employer demonstrated that its religious belief that gender is “an immutable God-given gift” would be “substantially burden[ed],” if the funeral home were required to employ a transgender worker. The district court’s ruling extended the reasoning of the U.S. Supreme Court’s decision, Burwell v. Hobby Lobby Stores, Inc. (2014), holding that a privately held corporation can be a protected “person” under RFRA.

The Michigan decision is unprecedented and raises difficult questions as to whose civil rights are more important — those of the employee protected from discrimination based on sexual stereotypes, or those of the employer, claiming religious beliefs.  What if a corporation claims a “sincerely held religious belief” that disfavors disabled persons, older workers, or racial minorities?  Would the court then allow discrimination against employees in those categories?

We shall see. In any event, privately held companies with religiously active owners can be expected to assert more RFRA rights and religious defenses in the future.  For a related discussion of state religious freedom laws at work, please see the attached American Bar Association paper that I co-presented at the Employment Rights and Responsibilities Committee meeting this spring.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

You’re Fired! And Other Trump Lessons in Employment Law

Gavel and flagThe 2016 Presidential campaign has provided lots of fodder for the discussion of legal issues that touch on labor and employment law.

Religion.  In December, Donald Trump proposed banning Muslims from entering the United States, citing concerns about “radical Islamic terrorists.”  If an employer has the same concerns about security, can it prohibit the hiring of Muslims?  No. Title VII of the Civil Rights Act and similar state laws prohibit employment discrimination “because of . . . religion,” with few exceptions – such as for religious institutions and very small “mom and pop” businesses.

National origin.  Mr. Trump next proposed a ban on immigration from certain countries that are known breeding grounds for terrorists, and has referred unfavorably to illegal Mexican immigrants.  If an employer has the same concerns, can it prohibit employment of persons born in certain countries?  Again, no.  Title VII and similar state laws also prohibit employment discrimination based on “national origin.”   Moreover, federal immigration law prohibits discrimination based on citizenship status, so long as the person has a legal right to work in the U.S.  Employers cannot ask an applicant whether he or she is a citizen and should only inquire if the applicant is eligible to work in the U.S.  On the other hand, it is illegal to hire undocumented aliens.

Wages.  An employer also would face challenges using Mr. Trump’s “breach and then renegotiate” approach to contracts when dealing with employee wages that already have been earned.  Unlike the U.S. Bankruptcy Code which permits paying pennies on the dollar for some debts, wage and hour laws don’t allow renegotiation of earned employee compensation, even if the enterprise is losing money (e.g., casinos in Atlantic City) or the boss decides to fire the worker because he or she is a “loser,” “stupid,” “lazy,” “low energy,” or “crooked” (see The Apprentice).  Moreover, even if a company goes under, its owners and executives still may be individually liable for unpaid wage obligations.  I know – that is so unfair.

Constitution.  Putting aside whether or not Mr. Trump ever read it, does the Constitution restrict the terms of employment by private employers?  Good news here for private companies – the Constitution generally restrains only the government and public employers.  The bad news – or good, if you believe in civil rights and other protections for workers – is that several other laws, as sampled above and below, fill in the void to restrict private employers.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Waiting time compensable?

The U.S. Supreme Court held in December in Integrity Staffing Solutions v. Busk that federal law does not require employers to pay employees for time they spend waiting to undergo antitheft security screenings in the workplace, but that’s not the end of the issue.

Many states have wage payment laws inconsistent with federal law on the duty to pay for activities “preliminary to or postliminary to” the principal work activity. Pennsylvania’s Minimum Wage Act, for example, requires employers to pay for “time during which an employee is required by the employer to be on the premises of the employer,” and that presumably would include waiting time for a security check.

So, be careful out there and check your state laws.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Complimentary Employment Law Seminar for HR Professionals

Click here to register.

Flaster/Greenberg attorneys Adam Gersh, Kenneth Gilberg and I have been tapped by Primepoint LLC, a payroll processing and HR information system technology company, to present a complimentary seminar for human resources professionals offering legal perspectives on the recent developments in labor and employment law.

The seminar, entitled “Employment Law Swiss Army Style: Your All-in-One Pocket Guide to the Latest, Hottest L&E Issues,” will discuss a variety of decisions that impact HR management and operation. Topics include: iPad = iLiable? Personal devices and overtime pay; Up in Smoke – Marijuana, e-cigarettes and other incendiary topics in the workplace; Same-sex marriage, sexual orientation and the Supreme Court; What’s new in medical leaves and disability law; Social media – latest cases on acceptable policies; and What you need to know about expanded workers rights and employer personnel policies in relation to the NLRB decisions impacting union and non-union employers.

The complimentary seminar will be held on Thursday, June 26 at 8:00 a.m. at Primepoint’s headquarters located at 2 Springside Road in Mt. Holly, New Jersey. Qualified human resources professionals will receive up to three (3) credit hours for recertification. For more information, or to register, click here.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Legal Alert – Valentine’s Day Edition: Is Office Romance Forbidden?

Guest Blogger: Adam Gersh, Shareholder, Flaster/Greenberg PC

It is Valentine’s Day and love is in the air, but also at the water cooler. A recent study found that—even in the age of online dating—the largest percentage of spouses met through work (21 percent). Another study found that 18 percent of couples who meet at work get married. Although it is inevitable that romances will develop out of workplace relationships, it is not all champagne and roses for employers, especially if a relationship sours.

From a legal perspective, consensual romantic relationships between coworkers, or even between a supervisor and an employee, do not, constitute sexual discrimination or harassment. Nonetheless, workplace romances can create particularly tricky situations for employers because:

  • Good relationships gone bad create risks (example: when a sexual harassment claim arises out of a failed relationship between a manager and subordinate, there may be extensive evidence of sexual or sexually suggestive conduct that is subject to multiple interpretations, some of which are unfavorable to an employer)
  • Disparity in work assignments arising from the relationship can negatively affect employment (example: upper management wants to discipline an employee who never works the night shift when, in reality, the employee’s schedule is a consequence of his romantic relationship with his direct supervisor who wants to keep the employee’s nights free for dating)
  • Favoritism causes peers to perceive they are being discriminated against (example: a paramour is not disciplined for late arrivals such that when her co-worker is disciplined, the co-worker believes she is a victim of discrimination)

Each situation is unique, but the underlying commonality is that romantic relationships between coworkers can throw off office equilibrium.

Due to the host of potential risks that may arise, employers should consider adopting policies to mitigate the risks caused by employees’ romantic relationships. However, there are no one-size-fits-all solutions. Larger employers may have the capacity to prohibit employee-supervisor relationships and adopt a policy of reassigning one of the employees, but many smaller employers simply cannot create that kind of separation.

Though an outright ban on office romances is not always necessary (and often impractical), employers should make sure they are aware of and document relationships by, at the very least:

  • Adopting a policy requiring employees to disclose a workplace romantic relationship to human resources or a chief officer immediately, especially when the employees are in the same chain of command
  • Requiring the employees to acknowledge their relationship in writing (often with an agreement called a “love contract”), including, among other things, a statement that the relationship is consensual, that the employees understand they are still subject to and protected by the employer’s anti-harassment policies, and that the employees may be subject to discipline if they allow the relationship to interfere with their employment duties
  • Seeking a release of all potential legal claims

The key is for the organization to implement disclosure and response policies that fit the culture and manage risks.

Once an employer is on notice of a romantic relationship in the workplace, it should take steps to evaluate and reduce the risk, including enforcing its policies consistently. The consequences of inconsistent enforcement can be real. In a recent California case, an employee involved in a workplace romance alleged that his employer disciplined him differently from similarly-situated employees who also had workplace relationships. The employee claimed he was treated differently due to discriminatory motives. This is just one example of the many ways inconsistent enforcement puts an employer at risk even if there is no discriminatory intent.

Does this mean there’s no place for love in the workplace? Certainly not. A number of studies have found that workplace romance can have a positive effect by increasing job performance, overall job satisfaction, an employee’s level of involvement, and organizational commitment. Well-tailored policies help employers maintain stability in the workplace and limit the risks that arise from office romances.

We simply suggest that employers create and enforce strong policies that meet their situation. If you have any questions, please feel free to contact Adam Gersh at adam.gersh@flastergreenberg.com.

 

 

Employer wins age case, despite mandatory retirement policy

Most cases are won or lost on the facts, but that chestnut minimizes the importance of zealous advocacy and persistence in legal battles.

Tokah v. Foxco Insurance Management Services, Inc., decided last month by the U.S. Court of Appeals for the Third Circuit, illustrates why first impressions based on a few “bad facts” do not mean the employer should give up. In Tokah, the plaintiff put forward three seemingly damning facts to support her age discrimination claim:

  • She was fired at age 66 after 14 years of service for the company, and despite not having any performance problems.
  • The company had a “mandatory” retirement policy in its Employee Handbook that required retirement after age 65.
  • A younger person was retained to perform the plaintiff’s job duties, and plaintiff was required to train her to do the job.

Faced with this evidence, especially the mandatory retirement policy, many companies would just say “get out the checkbook” and settle. But Foxco and its lawyers did not. They believed these facts did not tell the whole story, and they fought the case through a jury trial (which Foxco won) and an appeal (which Foxco also won, this month).

How did Foxco do it? Apparently through good old-fashioned hard work and compelling witness testimony to develop and explain the facts justifying the termination for non-discriminatory reasons. Instead of conceding the decisiveness of the plaintiff’s facts, Foxco showed that:

  • The mandatory retirement policy was not enforced and the decision-maker in the termination was not even aware of it until the plaintiff pointed it out.
  • Due to a substantial decline in revenues, the company had to terminate five employees, including plaintiff, and several were younger, showing the lack of an age-based motivation.
  • The retained employee had skills that the plaintiff lacked, justifying the company’s decision to retain her instead of plaintiff.

In the end, we also assume there were credibility judgments by the jury that favored Foxco. Again, this is a credit to the defense lawyer and the company, who obviously spent the time to properly prepare for trial and show why its stated reasons were bona fide, and that the plaintiff was not fired because of her age.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

If a Pennsylvania employer’s sales commission plan is unclear when the commission is “earned,” the employer may be on the hook for paying commissions to a terminated salesperson — even if the plan requires employment at the time of payment to receive the commissions.

If a Pennsylvania employer’s sales commission plan is unclear when the commission is “earned,” the employer may be on the hook for paying commissions to a terminated salesperson — even if the plan requires employment at the time of payment to receive the commissions.

That’s the surprising holding in O’Donnell v. Passport Health Communications, Inc., decided earlier this year by Chief Judge Petrese Tucker of the U.S. District Court for the Eastern District of Pennsylvania.

Pennsylvania’s Wage Payment and Collection Law does not create any substantive rights to compensation; rather it provides an avenue for an employee to enforce his or her right to be paid wages earned, per an agreement with the employer.

In O’Donnell, Passport Health’s sales commission plan provided sales commissions for the fourth quarter of 2010 were not paid out until February of 2011, and required the employee “must be employed at the time of payment to receive commissions.” The court noted, however, the plan did not make clear when the commissions were “earned,” which is vitally important under the Wage Payment and Collection Law. That statute provides that “Whenever an employer separates an employe[e] from the payroll, or whenever an employe[e] quits or resigns his employment, the wages or compensation earned shall become due and payable not later than the next regular payday of his employer on which such wages would otherwise be due and payable” (emphasis added).

The court held that, because the plan did not specify when the commissions were “earned,” a reasonable jury could find that the commissions were earned at some point prior to termination (i.e., by the end of the fourth quarter), and to fail to pay the commissions upon termination would be an unlawful “forfeiture,” despite the plan language indicating the employee had to be employed at the time of “payment” to receive the commission.

Action item: As a result of this decision, Pennsylvania employers should review their sales commission or bonus plans, and ensure the plan language clearly states commissions or bonuses are not “earned” until the time of payment, if that is the employer’s intent, and consider adding a statement explaining the rationale for such a rule (such as continuing the client relationship and servicing the sale).

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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