Employment Law Update
By Mike Judd
Hot Fall Trends: Latte Leather Jackets and Concerted Activity
Tastemakers at Vogue say that “red hot knits,” “elevated basics,” and “latte leather jackets” are trending this fall. But nothing, perhaps, was trendier this Labor Day season than labor organizations themselves. In Hollywood, a simultaneous actors’ strike and writers’ strike—the first such overlap in more than 60 years—ground productions to a halt. Those strikes may have been the most visible manifestation of increased union activity, but such activity is everywhere these days, including in the country’s sprawling health-care industry. In October, clinicians at a large Midwest health system became “the largest group of unionized private-sector physicians in the United States.” And just days ago, health-care workers at the University of Utah’s hospitals and clinics followed suit, organizing after years spent “sacrificing their own health to take care of patients in a system that they feel is critically understaffed.”
Given that organizing is in the air as the leaves turn this season, what’s an employer to do? One starting point may be to consider how U.S. labor laws may have affected employers even in non-unionized workplaces. Employers who attempt to stifle employee discussions regarding compensation, for example, or employers who utilize severance agreements with non-disparagement or broad confidentiality clauses, may already be running afoul of the law.
When “See You Soon” Becomes “See You Sometime:” First Circuit Court Reiterates that Open-Ended Leave May Not Qualify as a Reasonable Accommodation
Longtime subscribers to Parsons’ Employment Law Update already have a working understanding of Americans with Disabilities Act (ADA) claims, including that an employee bringing an ADA claim must show that he or she is a “qualified individual.” To be “qualified” under the ADA, an employee–plaintiff must show that he or she can perform the essential functions of his or her job with or without a “reasonable accommodation.” In many cases, then, an employer’s liability may turn on a simple question: Was the employee’s request for an ADA accommodation reasonable?
This month, the First Circuit Court of Appeals took on a common variation of that question in a case called Der Sarkisian v. Austin Preparatory School. In that case, the hard-luck plaintiff, Nancy Der Sarkisian, held a job admired by lawyers everywhere: ninth-grade English teacher. Only days into the school year, Der Sarkisian took four weeks of leave for hip-replacement surgery. Der Sarkisian asked to extend that leave for a second surgery, and then a third. While Der Sarkisian’s doctors offered their own vague predictions, Der Sarkisian’s opinion was that she was “unsure” when she could return to school. Her employer Austin Preparatory School eventually terminated Der Sarkisian, stressing that she could reapply when she was able to work, but that in the meantime, the school had “a growing need to fill [her] position.”
Der Sarkisian’s ADA claim failed, offering this explanation, which serves as a useful take-away for employers: “Mrs. Der Sarkisian had not set a return date, and such an open-ended request for additional leave is just the type of wait-and-see approach that has been rejected” in the reasonable-accommodation context. Employers should not be cavalier in applying that principle—key, in the court’s eyes, were the school’s need for a stable presence in the classroom and the fact that Der Sarkisian’s final leave request truly was open-ended.
Midwest Missteps Place Spotlight on Independent Workplace Investigations
College football is, as astute observers have noted, “awash in money.” More than a decade ago, ESPN paid more than $5 billion for a 13-year license to broadcast the three highest-stakes games each year. Recently, some of that money has ended up in players’ pockets through individual branding deals. But much of that money ends up in the coaches’ pockets. Remarkably, the highest-paid state employee in 31 of the 50 states is a college football coach, with some raking in as much as $10 million a year or more.
Those hefty salaries come with significant scrutiny. And colleges often spare no expense to address emerging scandals, retaining big-name law firms to conduct detailed investigations. When workplace conduct creates risks of institutional liability, investigations make sense. But investigations themselves are not cure-alls. Take two recent cases at prominent midwestern universities. At Northwestern University, head coach Pat Fitzgerald was fired after former players alleged that hazing went unaddressed. And at Michigan State University, head coach Mel Tucker was fired after the school determined that Tucker violated the school’s sexual misconduct policy in his interactions with a sexual-assault-prevention speaker. Both firings led to crackback allegations by the coaches, who argued that the investigations were botched or unlawful.
When an employer receives reports of serious workplace misconduct, there are rarely easy answers. But as these high-profile cases demonstrate, independent investigations offer employers certain advantages, both in avoiding bias and in bolstering the employer’s defense in future litigation.
Wow Your Colleagues with Insights Drawn from the EEOC’s Year-End Financial Report
It’s unclear, to this writer, whether, when Dale Carnegie published “How to Win Friends and Influence People” in 1936, the Equal Employment Opportunity Commission (EEOC) had begun to publish year-end financial reports. Surely, if Carnegie was writing that book in 2023, he would have urged readers to consider committing to memory factoids drawn from the EEOC’s Agency Final Report, then wielding that arcana at cocktail parties. How many operating districts does the EEOC have, you might wonder? Fifteen! What’s the adjusted penalty level, now adjusted for inflation, for violations of anti-discrimination notice-posting requirements? $659! What is the EEOC’s compensation-and-benefits funding request for Fiscal Year 2024? Just north of $337 million, a 3.6% year-over-year increase!
All HR-nerd-trivia jokes aside, the Report does offer insight into EEOC success stories, including a focus on “systemic discrimination” based on race, enforcement efforts related to religious and disability discrimination in the context of COVID-19 vaccine requirements, and multiple “systemic investigations” related to failures to recruit, hire and promote women. Employers who understand EEOC priorities are better equipped to stay on the agency’s good side—a sensible goal for every employer.
Company PTO Policies
By Jason R. Mau
Q. What’s the minimum amount of time we can require exempt employees to use their paid time off (PTO)? Under our benefits policy, a half day (four-hour deductions) for exempt employees is usually OK, and our nonexempt employees can take PTO one hour at a time, but could we require a similar two-hour increment for exempt employees, as well?
A. Neither the Fair Labor Standards Act (FLSA) nor Idaho law includes a specific provision requiring time-specific increments of PTO for exempt employees. However, regardless of the increments permitted under your benefits policy, the salary basis requirement under the FLSA must always be met. The salary basis provision requires full compensation in the predetermined amount for weeks in which any work is performed by the exempt employee and prohibits reductions from that pay unless covered by a specific exception. One such exception is for full-day absences unrelated to sickness or disability. Tracking PTO use is not covered by these same restrictions and can be reduced in any time increments to account for absences from work, full day or not.
So long as the exempt employee continues to receive the guaranteed salary, the PTO bank can continue to be reduced per the employer’s benefits policy. However, it is when an exempt employee’s accrued PTO runs out where an issue with the salary basis may arise and where a company may ultimately decide a benefits plan should only allow exempt PTO in full day or half day increments. Under these circumstances, if the exempt employee has run out of the accrued PTO, and is absent for less than a full day, the pay cannot be reduced to account for no available PTO and the employer must pay the entire guaranteed salary. Granted, an employer is still permitted to discipline the employee or deduct time from future PTO, but it may not reduce the paycheck for absences that are less than a day without jeopardizing the employee’s exempt status.