Legal Blog

Labor and Employment Telebrief 2.12.14

To listen to the Telebrief click on play arrow. By Howard K. Kurman, EsquireLabor and Employment Law An Edited Transcript. Issues discussed:

  1. NLRB  – proposed amendments to its rules and regulations governing representation  election procedures- “Quickie Election Rules”
  2. Student athletes at Northwestern University present petition to Chicago NLRB to declare themselves a union
  3. EEOC v. CVS – Severance Agreements
  4. EEOC Statistics for Fiscal Year 2013 – Lawsuits filed and mediation cases won
  5. Summers v. Altarum Institute – ADA amendments and 4th Circuit Court opinion by Judge Mott that “a temporary impairment of sufficient severity can constitute a disability”
  1. NLRB- Reconstituting “Quickie Election Rules”

The National Labor Relations Board is up to its tricks again. For those of you  who are still non-union companies, this would be relevant to you. For those of you who are heavily unionized, it is probably not of that much concern but I will mention it anyway. On February 4th , just a little more than a week ago, the National Labor Relations Board announced that it was issuing proposed amendments to its rules and regulations governing representation case procedures or election procedures Background

  • In June of 2011,the NLRB communicated with what were then called the “quickie election rules,” which would be a way of shortening the time between the filing of a union petition and the time that an election was actually conducted by the National Labor Relations Board.
  • That rule was struck down by the DC Circuit Court of Appeals because of the fact that they did not believe that the National Labor Relations Board had a valid quorum.  This goes back to the discussions that we had in the past regarding the fact that the board was not properly constituted.

NLRB Announcement of Intent re: “Quickie Election Rules” The NLRB is nothing but persistent and has indicated that it intends to reconstitute these quickie election rules and so has essentially said that they are going to implement these unless they receive a flood of negative comments on the proposed rule making by April 7th. What their intent is, is to publish this in the federal register, elicit comments from both union and management supports and then decide whether or not to implement these rules.  Interestingly, again out of the five members of the board, three of the Democratic members,  Pearce,Hirozawa and Schiffer, may have approved the rule; the two Republican members, Miscimarra  and Johnson, have dissented. The “Quickie Election Rules”: What they dictate For those of you who are not sure what these rules really pertain to or dictate, I will tell you very quickly:

  • First of all, (the rules) will greatly accelerate the time between the filing of a representation petition by a union and the time that the election is actually held.  Normally, it is about eight or so weeks between the filing of a petition and the date of a representation election.  This would drastically reduce this time  so that probably most elections would be conducted within about three or four weeks of the time that the petition is actually filed by the union.  And the less time that an employer has to campaign against the union that has filed the petition, the less apt it is to succeed in convincing its employees to vote non-union, which again is one of the underlying reasons in my opinion why the board is so staunchly behind it because they want to increase the percentage of unionization among the non-union companies.
  • Also, they will significantly reduce the ability of both parties to litigate issues before the board prior to an election and also interestingly it will require that an employer provide name and  address and email addresses of employees to the unions.  So there is no question frankly from a practical standpoint what this would mean or what this would do to those of you who work  for or represent non-union companies. If promulgated, it would drastically change the landscape of how representation petitions are filed or handled at the National Labor Relations Board.

I really think that even if the NLRB promulgates this particular rule, it will be the subject of litigation. The National Association of Manufacturers or the Chambers of Commerce will contest this just like the last one.  Unfortunately, it will not be dismissed on the procedural grounds  that the board’s not having a proper quorum.  If the employer groups are to prevail, they will have to prevail on the basis that these rules go way beyond the ordinary rule making power of the board and essentially negate or drastically cut into the congressional scheme that was laid out in establishing the rules for representation petitions and representation elections. So stay tuned on this. Significance and Action Item Again, this was just put out by the NLRB last week and certainly if enacted down the road it would have a dramatic impact on non-union companies and would I think militate greatly in favor of doing some heavy anti-union training among your supervisors and managers well  before the time that these regulations are even enacted. 2. Student athletes at Northwestern University filed petition under the NLRA to declare themselves a union   Another interesting development under the National Labor Relations Act was athletes particularly Those who play football for Northwestern University or with a Big Ten private university, filed a representation petition with the National Labor Relations Board seeking to declare themselves a union and to obtain collective bargaining rights with the university.  It was filed with the Chicago region of the National Labor Relations Board. This is a stretch because in order to have an appropriate petition that would be handled by the National Labor Relations Board, there would have to be a declaration that these athletes are employees under the National Labor Relations Act. I do not believe that they are employees. I believe they are student athletes at least as far as you can classify any of big time college athletes as student athletes, but I certainly do not think that they are employees, and if they are not employees ,then they have no right to unionize just as though many other people do not have the right to unionize including those people who are considered to be disabled under the law.  So stay tuned on that. It is an interesting development, the first petition filed by students at a university seeking to declare themselves as employees under the National Labor Relations Act. 3. EEOC announced that it has filed a lawsuit against CVS  A more practical issue arose just this week, February 11th, in which the EEOC announced that it has filed a lawsuit against CVS.  CVS as you know is a huge national pharmacy chain like Walgreens.  In the complaint filed by the Equal Employment Opportunity Commission, it is claimed that the CVS standard severance agreement that it provided to three employees:

  • Unlawfully restricted their rights to file  discrimination charges or to communicate in a meaningful way or cooperate with the Equal Employer Opportunity Commission.
  • They go on in their lawsuit to state that “CVS conditions the receipt of severance benefits for certain employees on an overly broad severance agreement set forth in five pages of small print”.

This is another situation comparable to the National Labor Relations Board’s paying attention to handbooks and to opening up inquiries that it traditionally has not engaged in.  Here, you have the EEOC filing suit against a large pharmacy chain on the basis that its standard severance agreement, and problematic clauses that it deems in this agreement, are violative of the law.  Some of these clauses that I am going to talk about in a minute are clauses that you all would typically find in the normal severance agreements that you have or that your attorneys give to you in order to negotiate severance deals with employees who are going to be terminated for one reason or another. In the lawsuit, the EEOC said that the following provisions were problematic:

  • First, a cooperation clause which requires the employees to notify CVS’s general counsel upon receipt of, among other things, an administrative charge or complaint.

It does not seem to me to be very controversial to demand that an employee notify the appropriate people if they are in receipt of an administrative charge or complaint which then could have legal consequences for the company.

  • Secondly, a non-disparagement clause which prohibited the employees from making any statements that disparages or harms CVS’s reputation.

Again, not a real controversial provision in my opinion; most severance agreements or separation agreements as they are sometimes called, are going to have mutual non-disparagement provisions, where it is agreed that the departing employee will not criticize or disparage the company and on the other hand the company agrees not to disparage the departing employee.  Nevertheless, EECO finds this provision to be problematic.

  • Third, a confidentiality clause whch prohibited the employee from disclosing any personnel information.  Again, most of you who have separation agreements are going to have a confidentiality provision which will prohibit the employee or the departing employee from talking about the consideration that was paid to him or her in exchange for that person’s release and in many cases will bind in a contractual way that employee not to disclose confidential information or proprietary information about the company.  I do not understand frankly where the EEOC is going with this but this is part of the lawsuit.
  • Fourthly, a general release which included any claims of discrimination.  Again, you are not going to pay if you are a company consideration to a departing employee unless you get an all encompassing and broad release.  So how the EEOC finds this to be problematic or violative is really beyond me.
  • Fifthly, a covenant not to sue which prohibits the employee from filing any complaints, actions, lawsuits or proceedings against CVS, but which expressly carved out the employee’s right to participate and cooperate with any state or federal discrimination proceeding or investigation.  As you know, the current state of the law is that you can prohibit the employee from collecting any monies pursuing you or filing a complaint after he receives the consideration in the separation agreement. What you cannot do is prohibit the employee from filing a charge of discrimination even when he agrees or executes a separation agreement.  But certainly most separation agreements will contain a covenant not to sue, which means that the employee is not going to sue his employer after departing and after having been paid consideration for his release.
  • And lastly, an attorney’s fees provision which requires the employee to reimburse CVS for its reasonable attorney’s fees incurred as the result of the breach of the agreement by the employee.  It is not uncommon in a separation agreement for both sides to be bound by a covenant that should either side breach the agreement and the non-breaching party sue that the party found to be in breach will pay the attorney’s fees of the non-breaching party.  Again, the EEOC finds this to be problematic for some reason.

This has been filed as I said in a Federal District Court and I would be frankly surprised if this lawsuit goes anywhere.  I really believe the EEOC has lost its mind and if they were to prevail all the way up through a Federal Court of Appeal, essentially many of the separation agreements that you all commonly use with your employees would have to be drastically amended.  I do not see that happening. I will follow this case and let you know what is going on along the line. Certainly CVS is a big enough entity that it will not lay down in this case I am sure and will certainly litigate this to the nth degree.  So stay tuned on this.  I think it is lunacy but we will see what happens with the lawsuit. 4. EEOC Statistics for Fiscal Year 2013 Speaking of the EEOC, they put out their statistics for the fiscal year 2013.  It is a long report and I am going to mention only two things,  just to give you some idea of some relevant statistics. In fiscal year 2013, the EEOC reported that it filed 131 lawsuits.  This is not counting the lawsuits obviously that were filed by private Plaintiffs.  This is the number of lawsuits that were filed by the Equal Employment Opportunity Commission against various companies. The way those  131 lawsuits broke down was:

  •  78 of those were filed under Title VII
  •  51 were filed under the  ADA
  •  7 contained ADA claims
  •  5 lawsuits involved the Employee Pregnancy Act and
  • 3 contained GINA claims.

So, the GINA claims that were filed were among the first GINA lawsuits filed by the commission.  I do not believe that many of you have exposure but these GINA lawsuits  arose where employers requested family medical history when conducting physical  examinations of employees, which as you know is no-no under GINA. The other interesting  statistic is that in fiscal year 2013 in its mediation program, those of you who have participated  in the Equal Employer Opportunity Commission’s mediation program should know, that they conducted 11,513 mediations .  Out of that 11,513,they were able to resolve 8890 cases or about  77%.  So, those of you who have an inclination to mediate a case, and many times you will not, but those of you who will, please be aware that the percentage of success at the EEOC is about 80% which  is a pretty high rate. Take Away: My own feeling of mediation at the EEOC is that you to be very careful about what cases you want to mediate or say that you will mediate and in those cases you need a good mediator to get it resolved.  So, the track record itself is pretty good when you are talking about almost 80% rate of success. 5.  Summers v. Altarum Institute – ADA Amendments   I want to mention a case that was just decided at the 4th Circuit.  A case called Summers v. Altarum Institute and this was decided by the 4th Circuit on January 23, 2014 a couple of weeks ago. The reason I want to talk about this case is it deals with an important element under the amendments to the Americans with Disabilities Act.  The opinion was written by Judge Motz. The case  got to the 4th Circuit because the lower court on a motion to dismiss, dismissed the claim of the Plaintiff  claiming that he had a disability under the ADA and was inappropriately terminated by the company.  As Judge Motz put it, pursuant to recent amendments to the Americans with Disabilities Act,  “a  sufficiently severe temporary impairment may constitute a disability.”  I will read that again  – “a sufficiently  severe temporary impairment may constitute a disability. Because the District Court held to the contrary, we reverse and remand.” What happened in this case On October 17, 2011 the Plaintiff, who was named Summers, fell and injured himself while exiting a commuter train on his way to another train.  The court says with a heavy bag slung over his shoulder, he lost his footing and struck both knees against the train platform.  Paramedics took Summers to the hospital where doctors  determined that he had sustained serious injuries to both legs.  Summers fractured his left leg and tore  the meniscus tendon in his left knee.  He also fractured his right ankle and ruptured the quadriceps patellar tendon in his right leg.  Repairing the left leg fracture required surgery to fit a metal plate, screws and bone into his tibia.  “Treating Summers’ ruptured right quadriceps required another surgery to drill a hole in the patella and refasten his tendons to the knee, “ is a quote right from the case. Summers’  own doctors prohibit him from putting any weight on his left leg for six weeks and estimated that he would not be able to walk normally for seven months at the earliest.  Without surgery, bed rest, pain medication and physical therapy, the Plaintiff alleged that he would likely not have been able to walk for more than a year after the accident. While he is in the hospital, Summers  calls the Altarum HR representative about getting short term disability benefits and working from home as he recovered. He was a senior analyst for this company. He gets the short term disability benefits but remember the accident happened on October 17, 2011. The company never follows up with this guy to discuss how he might successfully return to work and the company did not suggest any alternative reasonable accommodation or engage in any interactive process with him to discuss how he might be able to serve the company during this period that he was unable to really walk. Instead, on November 30, 2011, which is about six weeks after his accident, the company informs him that it was terminating him on December 1, 2011 in order to place another analyst in his role.  And the position of the company was that they were free to terminate this fellow because he had a temporary condition,and the court below agreed, saying that a temporary condition even up to a year does not fall within the purview of the ADA and, therefore, the Defendant was not disabled within the meaning of the law. Summers appealed and goes to the 4th Circuit and essentially he argues that he was disabled under the ADA’s actual disability prong and states that EVEN THOUGH his injury may have been temporary in the sense that after a year or so he probably could recover , nevertheless it was serious enough that it would constitute a disability under the amendments to the ADA. Essentially, the 4th Circuit agrees with Summers and what they say is that although impairments that last only for a short period of time are typically not covered they may be covered if sufficiently severe. And they cite from the EEOC appendix three principles: 1,  if an individual has a back impairment that results in a 20 pound lifting restriction that lasts for several months, he is substantially limited in the major life activity of lifting and, therefore, covered under the first prong of the definition of disability. 2. In dismissing Summers’ wrongful discharge claim, the District Court held that even though Summers had suffered a very serious injury, this injury could not constitute a disability because it temporary and expected to heal within a year.  That holding represented an entirely reasonable interpretation prior to the amendments to the ADA.  But in 2008 Congress expressly abrogated Toyota,( that was the prior case), by amending the ADA, and significantly, the 4th Circuit says this, “We are the first appellate court to apply the amendments’ expanded definition of disability. Fortunately, the absence of appellant precedent presents no difficulty in this case.  Summers has unquestionably alleged a disability under the ADAAA sufficiently plausible to survive a motion to dismiss. “ As they say, Summers alleges that this accident left him unable to walk for seven months and that without surgery, pain medication and physical therapy he likely would have been unable to walk for longer.  The text and purpose of the ADAAA and its implementing regulations may clear that such impairment can constitute a disability.  And so finally what they say is that although short term impairments qualify as disabilities only if they are sufficiently severe, it seems clear that the serious impairment alleged by Summers is severe enough to qualify. Essentially what the 4th Circuit is saying and the practical implications for you all:

  • First,  I am not sure why this was not a Family & Medical Leave Act qualification.  Evidently, this company did not have 50 employees.  If they had had 50 employees, Summers  would have been protected for 12 weeks anyway, but assuming that they are not an FMLA qualified company, the input of this is that this is the first federal appellate court decision that basically states that when you are evaluating an employee who is out with the disability and traditionally your evaluation would say , “Well look, this person only has a temporary disability whether it is a broken leg, broken arm, broken collarbone, etc.  If that injury is deemed to be serious enough, and of course that has elements of both an objective analysis and a subjective analysis, but if it is deemed to be serious enough then you are going to have to enter into an interactive dialogue with that employee because the courts will favor an interpretation which qualifies it as a disability under the ADAAA and, therefore, you are going to have to engage in an interactive process and/or interactive dialogue with that employee to see whether or not you can appropriately accommodate that individual.

So, it is a significant case and I believe that the 4th Circuit’s opinion, again just promulgated and announced at the end of January, Will be followed by other courts of appeal in the federal circuit courts. Take Aways Therefore, from a practical standpoint, you (employers) need to evaluate your policies and need to evaluate on an individual basis when somebody is out on an ADA situation.  Essentially, you are going to have to say, “Ookay, it may be temporary but is it a serious temporary accident, illness or injury?”  If it is, then you are going to have to enter into an interactive dialogue with that particular person to see whether or not you can reasonably accommodate that disability. Closing Remarks Those are the developments for the day.  As always, I invite any questions or comments either in this  forum or if you have a private question and then you want to run it by me my private number is 410-209-6417 and my email address is hkurman@offitkurman.com. Next L & E Telebrief:  Wednesday, February 26, 2014 | 9 – 9:30 am ET To participate, just call: Toll free: 866-906-0040 Entry Code: 6857306 Your PIN: _ _ _ _ _ _ No pre-registration.  All you need is a Personal ID Number (PIN). To get your PIN, contact Jeanne Hyatt at jhyatt@offitkurman.com or 410.209.6487.