Circuit Courts Continue to Rule in Agreement that Future Potential Disabilities are not a “Disability” under the ADA

The Seventh and Eleventh Circuit Courts of Appeal recently joined the Eighth, Ninth, and Tenth Circuits, in holding that individuals with no current disability cannot be regarded as disabled under the Americans with Disabilities Act (ADA).  The mere possibility or even likelihood the individual will develop an impairment or disability in the future is not sufficient to sustain a cause of action under the ADA.  In Shell v. Burlington Northern Santa Fe Railway Co., 941 F.3d 331 (7th Cir. 2019) and EEOC v. STME, LLC, 938 F.3d 1305 (11th Cir. 2019) the Seventh and Eleventh Circuits respectively, refused to extend protections under the ADA to employees with a “perceived risk” of potential impairment.

In Shell, a transportation company refused to hire a job applicant with a body mass index (BMI) over 40, which is classified as Class III Obesity or “extreme” or “severe” obesity.  The Defendant had a policy that prohibited individuals with a BMI over 40 from being employed in “safety-sensitive” positions, due to individuals with Class III Obesity being at an increased risk for sleep apnea, diabetes, or heart disease, conditions that could lead to dangerous consequences while on the job.  The Seventh Circuit first noted that obesity in and of itself does not qualify as a disability under the ADA, unless it is caused by an underlying physiological disorder or condition.  Likewise, obesity alone does not qualify as a disability even if the individual’s obesity may increase the likelihood that he or she will develop a future qualifying ADA disabling impairment.  The condition of being “regarded as” having an impairment applies when an individual has been subjected to an impairment, in a past or present sense, not a perceived future impairment that has not yet occurred.  Thus, the Seventh Circuit held that since Defendant only declined to hire the Plaintiff based on a perceived future impairment and not a current ADA disability, the ADA did not afford protection to the Plaintiff.

The employer in STME fired an employee who had traveled to Ghana during an Ebola outbreak in countries neighboring Ghana, even after the employer raised concerns about the Plaintiff making such a trip.  The employer’s decision was based on a potential future impairment, which is not protected by the ADA under the “regarded as” theory of recovery, which requires a current impairment.  The potential physical or perceived impairment of Ebola was not enough to get ADA protection; the Eleventh Circuit found there was no violation of the ADA in the firing of the Plaintiff.

Both cases demonstrate a continued trend at the appellate level of federal courts that future or potential impairments are not protected under the ADA.  This should be good news to employers who have concerns about potential impairments with employees and whether they feel such concerns could impact the ability for that employee to perform their job functions.

VW Contributor: Ryan J. Coufal
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Oral Argument to Be Heard By Supreme Court Over Specifics of Title VII

Supreme Court Update

The 2019-20 term of the United States Supreme Court opens today.

On October 8th, the Court will heard an oral argument on a set of cases that could determine whether sexual orientation and gender identity are covered by Title VII of the 1964 Civil Rights Act.  Courts and commentators are divided on the issue, which has been the subject of active litigation in multiple cases for several years.  This may be the most significant ruling of the Court in the area of employment law this term, and will be closely watched.

A decision could be issued before the end of the year; timing is to be determined by the Court.

https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/17-1618.html

VW Contributor: Matthew G. Dunning
© 2019 Vandenack Weaver LLC
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Final Ruling Announcement: Required Minimum Salary for Employees to be Exempt from Overtime

The federal Department of Labor has announced its final rule increasing the required minimum salary for employees to be considered exempt from overtime. The new threshold is $38,845/year, up from $23,660. At one point in time the DOL was going to require employees to be paid a minimum of more than $47,000 annually.

Absent litigation, or action by Congress, the final rule will be effective January 1, 2020.

https://www.dol.gov/whd/overtime2019/

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VW Contributor: Matthew G. Dunning
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Administrative Remedies in Discrimination Claims

By Matthew Dunning

Earlier this week the United States Supreme Court issued its unanimous opinion in Fort Bend County, Texas v. Davis, holding that a plaintiff’s failure to exhaust administrative remedies does not necessarily prevent the person from pursuing employment discrimination claims in court. In a charge filed with the federal Equal Employment Opportunity Commission (“EEOC”), the plaintiff in the case alleged that she was subjected to sexual harassment and retaliation for complaining about that harassment. She was subsequently fired for missing work to attend church services, and claimed that the termination was based on religious discrimination. However, she did not formally amend her EEOC charge to allege religious discrimination, opening the possibility that she had failed to exhaust her administrative remedies.

The plaintiff then filed a lawsuit in federal court, and claimed that she was subject to wrongful discharge based on unlawful harassment, retaliation and religious discrimination. The defendant initially defended the case without raising the failure to exhaust defense, and it was not until years later that the defendant filed a motion to dismiss.  The Court affirmed the finding of the lower appeals court that the motion to dismiss was untimely and should have been raised earlier in the case. This case has now been in litigation for 7 years, and is being sent back to the trial court for further proceedings.

In Nebraska, there is a statute that allows an aggrieved employee to go directly to court without filing a charge of discrimination with the Nebraska Equal Opportunity Commission (“NEOC”). Plaintiffs lawyers do not typically utilize this statute because remedies available under state law do not include punitive damages, which are available under federal law.  In addition, the lawyers appreciate the NEOC/EEOC process because it can lead to the discovery of information regarding an employer’s defenses, which the attorney can then utilize to develop the case in court.

When facing claims of discrimination, whether the employee is currently employed, or has already been terminated, employers should carefully consider the status and details of the allegations at each stage of the process, and identify the procedural requirements that may apply. For instance, if the person complaining is still an employee, the employer must consistently apply the applicable policies, typically included in an employee handbook. Failure to properly investigate and, if necessary, remediate a complaint of discrimination may, in and of itself, be considered evidence of unlawful discrimination.

Once an employee files a formal charge with the NEOC or EOC, or files litigation, the employer should carefully review all the applicable facts, particularly the timing of the allegations, and work with legal counsel to determine if there are any procedural or other irregularities to raise as defenses.

New Department of Labor proposed rule addressing calculation of employee’s regular rate of pay

For the first time in 50 years, the Department of Labor is proposing a rule to address the calculation of an employee’s regular rate of pay; an employee’s regular rate is used to determine the applicable overtime rate, and the calculation of the regular rate can be an issue in DOL audits, and litigation.

The DOL’s proposed rule includes clarification that the following forms of compensation are not required to be included in the regular rate:

the cost of providing wellness programs

payments for unused paid leave

reimbursed expenses that are not “solely” for the employer’s benefit
certain reimbursed travel expenses

Employers will want to take this opportunity to review existing pay practices, and determine if changes can be made.

Observations on LB400

LB400 was introduced in the Nebraska Unicameral, in January of this year to raise the minimum wage of tip earners.  The current minimum wage in Nebraska for tip earners is $2.13 an hour with restaurants ensuring tipped staff obtain at least $9.00 per hour combined standard wage and tips.  The bill was to raise the minimum wage to $4.50 an hour, without indexing the wage to the regular minimum wage.

The bill includes raises the following questions to assure compliance with wage laws:

1. Are the restaurants actually ensuring that the employees receive the $9.00 an hour combined standard wage plus tips or are they “gaming” the system to ensure more profits for the company?
2. Can the employees genuinely rely on the tips of the patrons?
3. Can “standard tips” accurately be reflected in the $9.00 per hour combined minimum standard wage plus tip?

As business owners, employers should consider reviewing current pay policies, including the often-used practice of tip pooling and/or tip splitting, in order to remain in compliance. Another compliance approach to consider would be the modification and reclassification of employees to non-tipped personnel.

 

https://trackbill.com/bill/nebraska-legislative-bill-400-change-the-minimum-wage-for-persons-compensated-by-way-of-gratuities/1636386/

 

The legislation is not finalized so there will be updates on the status of this bill.

Hair Based Discrimination

Expansion of protected classes to include hair in New York City; given the examples cited in the article, it seems that this sort of discrimination is already largely covered by existing law prohibiting discrimination on the basis of race. Employers in Nebraska and elsewhere should be aware of those issues, and establish clear policies regarding dress code and grooming standards, with uniform and consistent enforcement.

https://www.linkedin.com/feed/update/urn:li:activity:6503319813669167104

Preventing Third Party Harassment

By Matthew G. Dunning

While most employers are aware of their legal obligation to protect employees from harassment by co-workers, supervisors, and managers, a recent case from Mississippi highlights the need to prevent harassment by third parties, including patients and customers. Previous cases have involved harassment by customers at restaurants and casinos, with differing results based on the specific facts.

The plaintiff from the case in Mississippi worked as a CNA for an assisted living center, and was assigned to care for a patient with dementia who had a history of violent and sexual behavior toward patients and employees. The plaintiff alleged that the patient repeatedly made sexual comments and requests, and that he would physically grab her. Management was aware of the behavior based on employee complaints, documentation in the patient’s chart, and firsthand observation. The plaintiff was ultimately terminated for allegedly taking a swing at the patient in a particularly abusive incident during which she was groped and punched repeatedly. Following another incident with a fellow resident, the patient was moved to a nearby all-male facility. Based on affidavits, deposition testimony, and other documentation, the lower court granted summary judgment to the assisted living center, and dismissed the case.

On appeal, the Fifth Circuit noted that Title VII does not prohibit all harassment; a plaintiff must subjectively believe there is severe and pervasive harassment, and the plaintiff’s belief must be objectively reasonable. Previous cases involving repeated verbal sexual harassment by home health and nursing home patients were determined not to be sufficiently severe and pervasive when the conduct was not “physically threatening or humiliating, and did not pervade the work experience of a reasonable nursing home employee.”  That is, potential liability must be considered in light of the specific environment, and the “unique circumstances involved in caring for mentally diseased elderly patients.”  The appeals court held that, contrary to the lower court’s opinion, the allegations of persistent and often physical harassment in this case were sufficient to send the case to a jury.  “The ultimate focus of Title VII liability is on the employer’s conduct; in the case of alleged harassment by a third party, “a plaintiff needs to show that the employer knew or should have known about the hostile work environment, yet allowed it to persist.”

Regardless of potential legal liability, employers should take care to protect employees from this type of behavior. Mandatory training regarding sexual and other harassment should be provided to all employees, and a clear and effective policy and complaint mechanism should be in place so an employee has the opportunity to make allegations, and have them addressed. Supervisory and management personnel should receive separate training on how to recognize harassment and other discrimination, and human resources personnel should be trained on conducting investigations and recommending action by management that will prevent the harassment from continuing.

© 2018 Vandenack Weaver LLC

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Companies Accidentally Waiving Attorney-Client Privilege

In the digital age, most companies rely heavily on email to communicate, even with their attorney. Generally, attorney-client privilege will apply to these emails, but when the client forwards the email, questions about privilege can arise. As several cases in 2016 highlight, many employees will forward an attorney’s email without significant thought, but prior to forwarding the email, care should be taken to avoid inadvertently waiving privilege.

 

As highlighted by AU New Haven, LLC v. YKK Corp., No. 1:15­CV­3411­GHW, (S.D.N.Y. Sept. 28, 2016), when a company employee forwards an attorney communication to non-attorney employees, several rules will apply. As a default, generally, if the email is forwarded to employees of the company, the privilege will be retained. Similarly, if everyone receiving the email is deemed to have a common interest, even if not a direct employee, privilege is often retained. However, if one person doesn’t share the common interest, privilege is broken.  An example of broken privilege, in Newman v. Highland School District No. 203, 381 P.3d 1188 (Wash. 2016), the court refused to uphold privilege because the employee was no longer employed by the company. Thus, the court determined that privilege did not apply because the employee that received the communication was now a former employee.

 

Overall, these two cases highlight the fact specific nature of whether privilege is retained when an employee of a company forwards an email from the company’s attorney. Moreover, the determination of whether privilege was retained will be specific to the state. Thus, employees of a company receiving privileged communication should take steps to retain privilege, including having internal policies about forwarding emails from the company attorney.

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Department of Labor Delays Implementation of the Fiduciary Rule

Last year, the Department of Labor (“DOL”) issued a final rule, expanding the definition of a fiduciary, making many broker-dealers and insurance agents fiduciaries. This rule, issued April 2016, was set to become effective June 2016, but was then delayed until April 10, 2017, with certain provisions delayed until January of 2018. However, President Trump ordered a review of the new rule and the DOL issued another delay, of 60 days, to complete the review. With the delay, the expanded fiduciary definition will become effective June 9, 2017.

Under the rule, a person or firm that is deemed a fiduciary is required to act in the best interests of their clients. This includes an obligation to avoid conflicts of interests, or otherwise receive compensation that creates a conflict between the interests of the fiduciary and the client. The new rule poses several issues for certain professionals that will be deemed a fiduciary under the new rule. For example, sales commissions would be deemed a conflict of interest, creating an especially problematic situation for broker-dealers that engage in principal transactions with clients. However, the DOL recognized the issue and created several principal transaction exemptions, but the exemptions require additional burdensome steps. This issue, among others, are central to the review causing the rule to be delayed.

Despite this delay, and the DOL admitting the review will not be complete by June 9, 2017, the expanded definition of fiduciary will be implemented at the end of the 60-day delay. Therefore, broker-dealers, insurance agents, and others that will now be deemed a fiduciary, should be prepared for the additional requirements on June 9, 2017.

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