Fourth Circuit Substantially Reduces Jury's Emotional Damages Award in False Claims Act Case
In the Fourth Circuit (the federal court with appellate jurisdiction over the district courts in Virginia, Maryland, West Virginia, South Carolina and North Carolina), six-figure compensatory damage awards are frequently viewed as excessive. This Court has repeatedly emphasized that while a plaintiff’s testimony can theoretically support a large emotional damage award, such evidence alone usually does not pass muster. The recent Virginia Federal Court decision of Huang v. The Rector and Visitors of the University of Virginia, et al., which involved a False Claims Act retaliation claim, followed the same line of reasoning and reduced the jury’s award by hundreds of thousands of dollars.
After a four-day trial, a jury found in favor of Plaintiff Huang on his False Claims Act retaliation claim and awarded $159,915 in lost wages and $500,000 in compensatory damages. The only evidence introduced by Plaintiff in support of compensatory damages was his own testimony of the effects of the retaliation by Defendants. Plaintiff testified that the retaliation ended his academic career at the University, caused the loss of his research grant, limited his ability to obtain subsequent employment, caused a significant fifty pound weight loss and sleep issues, and put a strain on his marriage. But, he did not present any evidence of medical treatment, counseling, medications, physical injuries, etc.
In reducing the jury award in Huang, the Fourth Circuit considered the succession of case decisions involving emotional damage awards. The Court rejected the implication that there is a bright-line rule in the Fourth Circuit that six-figure awards are excessive in the absence of medical evidence. But, the case awards examined all had been significantly reduced by the Court. Three cases ultimately resulted in awards no greater than $15,000 and another jury award was reduced to $50,000. In another case, the Fourth Circuit found that the plaintiff had presented “considerable objective verification of her emotional distress,” but the award was still reduced from $245,000 to $150,000.
The Fourth Circuit noted that certain factors were helpful in determining what evidence of emotional distress had been offered, such as whether the plaintiff had received medical attention or psychological treatment, or had physical injuries or loss of income. In addition, the Court noted that corroborating testimony of plaintiff’s distress was a factor to consider when deciding whether to reduce an award. Given the specific description of the emotional distress offered by the Plaintiff in Huang, the Court determined he had provided a solid basis for a significant award of compensatory damages. But given the lack of objective verification evidence, the award was reduced from $500,000 to $100,000.
In assessing the potential damages in a case, the above decision provides further assistance in placing a dollar value on emotional injuries. For injuries that defy a fixed rule of quantification, this legal authority is a helpful guide for the assessment of the degree of harm allegedly suffered.
© Copyright, PCT Law Group 2013, all rights reserved.
Faulty EEOC Charge Leads to Dismissal of Sex Discrimination and Retaliation Claims
An employee who alleged she was subjected to a sexually harassing work environment, gender discrimination, and retaliation under Title VII of the Civil Rights Act of 1964 (“Title VII”) filed a Charge with the Equal Employment Opportunity Commission (“EEOC”). However, almost all of the facts supporting the employee’s Charge were put in the EEOC intake questionnaire and letters to the EEOC, rather than in the EEOC Charge Form. As such, only the claims and facts set forth in the Charge were considered by the Court and they were insufficient to state the discrimination and retaliation claims raised by the employee.
In the case of Balas v. Huntington Ingalls Industries, Inc. (2013), the United States Fourth Circuit Court of Appeals affirmed a ruling from the Eastern District of Virginia that the Plaintiff, Karen Balas, could not maintain claims which were solely asserted in her EEOC questionnaire and in letters to the EEOC. The Court ruled that an administrative charge serves a vital function in the process of [potentially] remedying unlawful employment practices because it serves to alert the employer of the alleged wrongs committed; allows for an investigation into the alleged wrongful activity by the employer and the EEOC; and allows for the EEOC to seek conciliation between the parties if it finds merit to the charges. The Court reasoned that since a plaintiff’s employer is not put on notice as to the claims and facts alleged in the EEOC questionnaire or in letters privately written by a plaintiff to the EEOC, only those claims formally made part of the EEOC Charge were allowed to move forward in a lawsuit against an employer.
The Fourth Circuit concluded that the district court was correct in its refusal to consider any of Ms. Balas’ Title VII claims that were not included in her EEOC Charge; and that the Court had no jurisdiction to hear such claims because the Plaintiff had failed to administratively exhaust her remedies before filing such claims in federal court.
© Copyright, PCT Law Group 2013, all rights reserved.
Plaintiff Denied Promotion Based Upon Job Interview Survives Summary Judgment
When interviewing employees for a job promotion, it is probably best for the employer to have selection criteria that go beyond an employee’s performance during the job interview.
In the case of Hill v. Commonwealth of Virginia Department of Transportation (“VDOT”) (2013), a Virginia Federal District Court held that the employer’s stated reason for passing over the Plaintiff was not enough to grant summary judgment in favor of the employer. Plaintiff, Pamela Hill, applied for the position of assistant district administrator for construction and preliminary engineering. She, along with eight other candidates, interviewed for the position. Ultimately, a male colleague, Christopher Blevins, was chosen for the promotion. Hill alleged gender discrimination under Title VII of the Civil Rights Act of 1964 for being passed over for the position. Hill alleged that she was more qualified than Blevins and cited to her seventeen years of experience working for VDOT, prior promotions, supervisory experience, and her Bachelor’s Degree in Mining Engineering (Blevins did not have a college degree). At summary judgment, VDOT apparently did not argue that Blevins was more qualified than Hill. Instead, VDOT relied solely on its assertion that Blevins provided better answers to the interview questions than Hill.
In denying VDOT’s summary judgment motion, the Court held that Defendant’s nondiscriminatory reason for denying Hill the job promotion – a few lines of interview notes from the candidate interviews – was “entirely subjective and meagerly explained.” While the Court readily acknowledged that prior cases within the Fourth Circuit have upheld subjective employment decisions based (at least in part) upon interviews, it noted that those cases also included some objective criteria upon which the employer based its employment decision. Ultimately, the court held that VDOT’s reliance solely upon a few lines of interview notes was not enough to meet its burden at the summary judgment stage, and the case was allowed to proceed to a jury trial on the merits.
While it is fine to make a promotion based upon performance during an interview, this court decision is a reminder to employers that additional and objective promotion criteria should be utilized and documented in order to provide a clear non-discriminatory reason for the promotion decision.
© Copyright, PCT Law Group 2013, all rights reserved.
Use of Misappropriated Trade Secret Not Required For a Trade Secrets Act Violation
If an employee misappropriates their current or former employer’s proprietary information, and discloses such information to its new employer and/or any other unauthorized person(s), that is enough to establish a violation under the Virginia Uniform Trade Secrets Act (“VUTSA”) so says the Virginia Supreme Court. There is no requirement under the Act that the employee or new employer actually use the misappropriated information to compete with the former employer.
In the case of Geographic Services, Inc. v. Collelo, et al. (2012), the Virginia Supreme Court held that once an employer establishes the existence of a trade secret, all that they are then required to show is that the trade secret was misappropriated as that term is defined under the Trade Secrets Act. The entity from which the trade secret was misappropriated does not have to show that defendants used the trade secret in order to establish a claim under the VUTSA and recover damages. Disclosure of the trade secret is sufficient where it can be shown that the new employer and/or person to whom the trade secret was disclosed knew, or had reason to know, that the trade secret was acquired by improper means. In such cases, where the plaintiff cannot readily prove measurable damages, then the VUTSA provides that the court can impose a reasonable royalty upon the wrongdoers for the unauthorized disclosure of the trade secret.
This decision by Virginia’s highest court provides a cautionary note for Virginia employers: if you know, or should have known, that an employee has obtained proprietary information from its prior employer without its knowledge, you could be on the hook for damages if the employee discloses the information to your company – even if your company never uses the information. The disclosure, in and of itself, will be enough to expose companies to monetary damages. Conversely, companies in which an employee has taken proprietary information can seek legal redress and possibly obtain damages even if the employee and its new company did not use the information.
© Copyright, PCT Law Group 2013, all rights reserved.
Inequitable Treatment in Severance Packages May Lead to a Discrimination Claim
Although not contractually required to do so, many employers offer their management-level employees a severance package in the event of a reduction-in-force or some other non-disciplinary event which requires an employer to terminate a relationship with a managerial employee. The terms and compensation contained in severance packages usually depend upon salary, years of service, and work performance and/or value of the employee to the employer. However, if an employee can show that the terms of a severance package offered to them are less favorable than those offered to other, similarly situated employees, the employee may be able to state a claim for discrimination.
In the case of Gerner v. City of Chesterfield, Virginia (2012), the United States Court of Appeals for the Fourth Circuit reversed a lower court ruling from the Eastern District of Virginia and found that although a severance agreement is offered upon employment termination and is not a contractual right, it is nevertheless an employment benefit upon which a discrimination claim may lie. Finding that the district court judge (Hudson, J.) erred in his analysis of the legal standard, the appellate court held Title VII protects current and former employees from discrimination, as well as those who have not been hired and have been discriminated against in the hiring process. Further, the Court found that Ms. Gerner's allegations that she was offered a less favorable severance package than her male counter-parts under the City’s reduction-in-force plan, were sufficient to allege an adverse employment action for a gender discrimination claim. In making its ruling, the Court relied upon U.S. Supreme Court precedent and decisions from other Circuit Courts.
This decision by the Fourth Circuit, which is the highest federal appellate court for Virginia, Maryland, West Virginia, and the Carolinas, is a reminder to employers that they must be vigilant in making sure that employment benefits (even severance packages which are often viewed as “voluntary” or “discretionary”) are provided on an equitable basis. Alternatively, employers must make sure that they have a strong, non-discriminatory, reason for any difference in the provision of such benefits among similarly situated employees.
© Copyright, PCT Law Group 2012, all rights reserved.
Employee Allowed to go Forward with Sexual Harassment & Retaliation Claims
The Fourth Circuit Court of Appeals allowed a former city employee’s sexual harassment and retaliation claims to proceed to trial by reversing a lower court ruling which granted summary judgment in favor of the employer. Plaintiff Katrina Okoli, formerly an executive assistant for John P. Stewart, the director of Baltimore’s Commission on Aging and Retirement, filed a lawsuit alleging sexual harassment hostile work environment, quid pro quo sexual harassment, and retaliation. In the case of Okoli v. City of Baltimore, et al., Plaintiff Okoli alleged that over a four month span, Defendant Stewart repeatedly sexually propositioned her; told her of his alleged sexual exploits; asked her about her underwear; fondled her leg underneath a table on several occasions; and forcibly tried to kiss her when they were alone in a conference room. Okoli alleged that she rejected such advances by Stewart and also twice complained about the harassment to officials within the City government, as well as wrote a letter to Baltimore’s then-mayor Martin O’Malley concerning the harassment. Okoli was fired by Stewart just hours after her letter was received by the mayor’s office.
For its part, the City contended (and apparently the lower court agreed) that Stewart’s conduct was sporadic and infrequent and did not rise to the level of a hostile work environment. Further, the City argued that Okoli’s work had deficiencies, and that she was going to be fired even before she wrote the letter complaining of Stewart’s behavior. Additionally, the City argued, Okoli’s letter was non-specific and did not state that she was being “sexually” harassed by Stewart, only “harassed.” Therefore, they argued, Okoli did not engage in protected activity under Title VII to warrant a retaliation claim against the City.
The Appellate Court disagreed and held that the statements attributed to Stewart were both severe and pervasive. In addition, the Court held that a plaintiff need not mention the “magic words” of “sex” or “sexual” to effectively advance a sexual harassment complaint. Citing decisions from other circuit courts, the Court held that the complainant only need put the employer on notice that unlawful behavior is afoot. Okoli’s use of the words “unethical,” “degrading and dehumanizing” in her letter complaining about Stewart’s behavior were enough to raise a sexual harassment complaint. Finally, the Court determined that the district court erred in concluding that simply because Stewart had a document on his computer that pre-dated Okoli’s letter, such document was a termination letter. Stewart modified the computer document three times before delivering it to Okoli as a termination letter just hours after her sexual harassment complaint reached the mayor’s office. Under those facts, the Court concluded that there was sufficient evidence to infer that Stewart did not intend to fire Okoli prior to receiving word that she complained about his behavior to the mayor and his staff.
The Fourth Circuit Court of Appeals hears appeals involving Virginia employment cases.
© Copyright, PCT Law Group 2011. All rights reserved.
Eastern District of Virginia Court Allows FMLA Suit Against Individual County Official
Individual May Be Deemed an "Employer" Under the FMLA
Plaintiff Patricia Weth, formerly a deputy treasurer for litigation in the Arlington County Treasurer’s Office, took leave under the Family and Medical Leave Act (“FMLA”) for several weeks during December of 2009 until mid-February of 2010 to have medically necessary surgery performed. On the same day that she returned to work from her medical leave, Weth was told by her boss, Arlington County Treasurer Francis O’Leary, that he wanted her to find a new job and that her main focus should be finding a new job. O’Leary promptly stripped Weth of almost all of her job duties, and told her she was no longer to perform other job duties with the exception of one project and the duty of finding a new job. Predictably, under such facts, Weth filed claims of FMLA interference for the County’s failure to place her in the same or similar position after her FMLA leave as she had prior to the leave; and a claim of FMLA retaliation for her demotion and discharge after returning from FMLA leave. However, Weth’s lawsuit ran into a stumbling block concerning the appropriate defendant(s) to sue.
In the case of Weth v. Francis X. O’Leary, Plaintiff initially filed suit against Arlington County, the County Treasurer’s Office, and Defendant O’Leary. However, since County Treasurers such as O’Leary are deemed independent constitutional officers under the Virginia Constitution, the Court dismissed the case against the County and the Treasurer’s office as they were improper Defendants. Weth then filed an Amended Complaint against O’Leary in his official and individual capacity. On summary judgment, after dismissing the case against O’Leary in his official capacity based upon sovereign immunity, one of the main issues revolved around whether O’Leary, as a County official, could be sued under the FMLA in his individual capacity as an “employer”. Acknowledging that the issue remains an open question in the Fourth Circuit, and that there is a split on the issue within the federal courts, the Court looked to the text of the FMLA and the holding of a majority of the district courts that have ruled on the issue. In particular, the Court looked to the Fifth and Eight Circuits, which (relying upon the text of the FMLA) have held that public agency officials, including state officials, can be sued in their individual capacities if they act directly or indirectly on behalf of the employer. A prominent example of such authority being the hiring and firing of employees.
In this case, since O’Leary clearly had the authority to hire and fire employees such as Plaintiff Weth, the Court held that he could be sued in his individual capacity under the FMLA. The Court concluded that to rule otherwise would run contrary to the very text of the FMLA, which, in addition to including those with such authority as O’Leary in the definition of an employer, also states that “public agencies” are included within the definition of employer. Therefore, the Court ruled that Plaintiff Weth will be allowed to pursue her claims against Defendant O’Leary in his individual capacity at trial.
© Copyright, PCT Law Group 2011. All rights reserved.
Virginia Federal Jury Rules on Virginia Tech Equal Pay Case
A Virginia Federal Court jury recently determined that Virginia Tech violated the Equal Pay Act, and awarded back pay to two women employees of its fundraising office. The Equal Pay Act is a federal law amending the Fair Labor Standards Act, which prohibits employers from paying unequal wages to women and men for doing the same or substantially similar work.
To establish a case under the Equal Pay Act, an employee must establish that:
- different wages are paid to employees of the opposite sex;
- the employees perform substantially equal work on jobs requiring equal skill, effort and responsibility; and
- the jobs are performed under similar working conditions.
However, an employee who proves all the above elements may still not prevail. A business may avoid liability if it establishes that such payment was made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any other factor other than gender.
In the Virginia Tech cases, the two women claimed their starting salaries were lower than the men who did the same work. In its defense, Virginia Tech countered that the men had more experience when hired.
Both sides presented extensive statistical evidence. According to the plaintiff’s economist, men’s salaries involved with Virginia Tech’s fundraising were an average of 15% higher. Virginia Tech’s expert analyzed the experience and duties of the employees, and determined there was only an 8% difference. Tech's expert concluded that this difference could be linked to gender, but opined that there was a chance it occurred randomly since the disparity was not statistically significant.
Notably, one of the women testified that when she inquired about the pay differential between her and her male predecessor, the senior regional director of major gifts replied that her predecessor had a family to support. In addition, the Judge identified other statements that tend to show Virginia Tech's animus toward the women when he previously denied Virginia Tech's motion for summary judgment.
How does your company prevent potential liability under the Equal Pay Act? Businesses should evaluate its pay structure, including policies regarding seniority systems, merit systems and incentive systems in light of the prohibition of gender pay disparity. An effective way to prevent managers and supervisors from making compensation decisions based on a protected category under the discrimination laws is to establish and implement a comprehensive job evaluation system. As the lawyers for the women argued during the trial in this matter - if Virginia Tech "had good policies, we wouldn't be here."
FLSA Compliance for Company's Unpaid Interns
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As summer quickly approaches, businesses begin receiving an increasing number of offers for unpaid internships. As many businesses already know, there are many advantages to using an intern – unpaid internships may help fuel growth for your company and also provide an opportunity to mentor young professionals. However, unpaid interns can create legal troubles for the unwary business owner. Federal labor laws governing internships provide that the relationship has to benefit the intern more than the company. If it doesn’t, then the business must comply with the Fair Labor Standards Act (“FLSA”) by paying minimum wages and possibly overtime.
The U.S. Department of Labor’s Wage and Hour Division outlined a list of criteria to determine whether a trainee or intern is an “employee” under the FLSA, and thus, must comply with Federal wage laws.
The following criteria provide guidance in evaluating internship programs for for-profit organizations, but it is important to note that each program is unique and must be carefully examined:
- the training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
- the training is for the benefit of the trainee;
- the trainees do not displace regular employees, but work under close observation;
- that the employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;
- the trainees are not necessarily entitled to a job at the completion of the training period; and
- the employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.
If your company’s internship program does not satisfy all of the above criteria, your interns may be considered “employees” under the FLSA. Hiring an intern, which qualifies as an “employee” may cost your company thousands in unpaid wages and legal fines!
So, how do you ensure compliance? Establish a written internship program outlining the terms and structure of the relationship in a way that the intern is receiving the full benefit of the learning experience, and ensure that your managers and other employees properly implement it.
Federal Employee's Discrimination & Retaliation Claims Dismissed
Federal employee Robert T. Perry (“Perry”) had a long-running legal battle with his federal employer, the Pension Benefit Guaranty Corporation (“PBGC”). After three lawsuits, two of which were settled, Perry’s claims of hostile work environment and retaliation have now been dismissed on summary judgment.
The case, Perry v. Gotbaum, was the third lawsuit brought by Perry against the PBGC and centered around Perry’s allegations that the PBGC discriminated and retaliated against him based upon a Settlement Agreement entered into by the parties to settle the first two lawsuits. As required under the Settlement Agreement, the PBGC provided Perry with a grade and step increase in salary, paid for $10,000 worth of training, paid Perry a lump sum of $60,000, and placed him on Leave Without Pay (“LWOP”) Status for a time-period not to exceed six months. In addition to proving Perry with a salary increase and training, it appears that the impetus behind the Settlement Agreement was to provide Perry with an opportunity to find employment outside of the PBGC and give him a lump sum payment during his job search. Per federal government regulations, the personnel actions required under the Settlement Agreement had to be documented using a federal government Standard Form 50 (“SF-50”).
In his third lawsuit, Perry complained, inter alia, that the comments section of the SF-50 forms used to process the personnel actions included information referencing his prior lawsuits and the Settlement Agreement. According to Perry, such comments would have a chilling effect on his ability to seek employment outside of the PBGC because it would be clear that he had engaged in protected activity. Further, Perry complained that the PBGC had used a more generic code when processing SF-50 forms for other employees, and therefore he should have been afforded the same treatment.
While the Court agreed with Perry that he engaged in protected activity regarding his prior lawsuits and the resulting Settlement Agreement, the Court ruled in favor of the PBGC finding that the Agency actually went back and corrected the SF-50 forms to respond to Perry’s concerns about the remarks placed on the forms. Further, since the Settlement Agreement was not confidential and had been filed with the Court, it was a public record and Perry could not base his claims of a retaliatory and/or discriminatory disclosure upon information that was generally available to the public. In addition, the Court found that there was no basis to find the PBGC’s “honest mistake” was an attempt to hamper Perry’s future job opportunities since it was in the Agency’s interest to have Perry find employment outside of the PBGC as soon as possible. As such, the Court dismissed Perry’s federal employment discrimination and retaliation claims.
It should be noted that the legal standard applied by the Court in this public sector case applies to private sector Virginia businesses as well.
Fourth Circuit Court of Appeals: Employer May be Liable for Harassment by Customer
In an unpublished decision, the Fourth Circuit Court Appeals recently held that an employer may be liable for third-party harassment by a customer if the employer knew or should have known of the harassment and failed to take appropriate actions to halt it. The evidence of repeated complaints to supervisors and managers by the employee created a triable issue as to whether the employer had notice of the harassment, and thus, the Appeals Court allowed this claim to go forward to trial.
In EEOC v. Cromer Food Services, Incorporated, a route driver for a southeastern vending machine company alleged he suffered daily sexual harassment at the hands of two housekeeper employees of one of the company’s largest customers – a hospital. According to the driver, the harassment began after a co-worker left a note in the hospital cafeteria calling him gay. Following this incident, the two male hospital employees allegedly began harassing him with unwanted sexual comments.
The driver claims he complained to numerous people at CFS, including his supervisor, his direct supervisor, another supervisor, a manager of the company, and the chairman of the Board. As the harassment continued, he took more drastic measures by reporting the harassment directly to a human resources professional at the hospital and to the supervisor of the two hospital employees. But, the hospital employees were unrelenting.
In response to this lawsuit, the company asserted that it did not have actual or constructive knowledge of the harassment because the complaints by the driver were vague and insufficiently detailed for action to be taken. In addition, the company pointed out that the employee failed to report the harassment to its President in accordance with the company’s written sexual harassment protocol.
The Fourth Circuit reversed the trial court’s dismissal of the claim. In doing so, it noted that the District Court focused on only one snippet of the driver’s deposition testimony which stated that he did not provide details of the harassment to the company. The Appeals Court acknowledged that although anti-harassment law requires notice to the employer – it should not require it to be pellucid.
The Fourth Circuit also pointed out the flaws in the employer’s approach in this matter. The Court stated that harassment claims could not be avoided by utilizing a “see no evil, hear no evil” strategy, and it criticized the protocol requiring reports to be made to the President by recognizing that such requirement may likely intimate an employee. Moreover, the Court drew attention to the fact that management failed to report the harassment up the chain of command as required by company policy.
This case illustrates to employers within the Fourth Circuit (which includes Virginia, Maryland, North Carolina, West Virginia and South Carolina) that a company’s written policy for reporting harassment may not provide insulation from liability under Title VII. Virginia businesses must ensure that they have a reasonable process in place to address allegations of harassment by its employees and third parties.
US Supreme Court: Title VII's Antiretaliation Provision Covers Third Parties
In a unanimous recent opinion, the United States Supreme Court broadly construed the term “person aggrieved” in Title VII's antiretaliation provision to include a co-worker who is a relative or close associate of a targeted employee.
In the case of Thompson v. North American Stainless, LP, Plaintiff Thompson worked as a metallurgic engineer for North American Stainless (“NAS”), the owner and operator of a stainless steel manufacturing facility in Kentucky. Thompson began dating a coworker, and thereafter they became engaged to be married. According to the lawsuit, the couple’s engagement was common knowledge at the facility. Three weeks after the Equal Employment Opportunity Commission notified NAS that Thompson’s fiancée had filed a discrimination charge, NAS fired Thompson. Thompson pursued a retaliation claim against NAS for his discharge.
NAS moved for dismissal of the case before trial, contending that Thompson’s claim of third-party retaliation under Title VII was insufficient as a matter of law. The trial court granted NAS’s motion for summary judgment, which decision was affirmed by the Sixth Circuit Court of Appeals. In denying Thompson a trial, the Sixth Circuit joined several other appeals courts in holding that the authorized class of claimants under Title VII’s antiretaliation provision is limited to persons who have personally engaged in protected activity.
The Supreme Court disagreed, and rejected this narrow interpretation of aggrieved persons under the law. However, it declined to expand the provision into the outer boundaries of the standing standard set forth in Article III of the Constitution – which would allow anyone who claimed an injury by a Title VII violation to sue. The Court noted that such expansive interpretation would allow a shareholder to sue a company for firing a valuable employee for racial discriminatory reasons if he showed a decrease in his stock value as a consequence.
In settling on the middle ground, the Supreme Court stated that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” The Court’s concern was to prohibit employer action that would dissuade a reasonable employee from asserting or supporting a discrimination claim. Thompson fell within the zone of interests protected by the law.
Employment Pointer: This decision clears up the ambiguity over whether third parties have standing to sue for retaliation under Title VII. Although, the Court noted that there is no bright line test for who is protected. Given the broader scope of persons to be protected under this law, companies must be aware of its management’s underlying reasons for adverse employment actions and ensure that indirect revenge against an employee for filing a discrimination charge has not been a contributing factor.
IRS Announces Standard Business Mileage Reimbursement Rate for 2011
Employers should take notice that the Internal Revenue Service (IRS) has announced a standard business mileage reimbursement rate of 51 cents per mile for 2011. The business mileage reimbursement rate is used by many employers for computing the appropriate employee reimbursement amount in instances where an employee uses a personal vehicle for a work-related purpose. The new mileage reimbursement rate, which takes effect on January 1, 2011, represents a slight increase from the rate set by the IRS in 2010 of 50 cents per business mile driven.
Employers with an established personnel policy should update their employee handbooks by year-end to reflect this change. Those employers who do not have an established policy for reimbursing employees for business miles traveled in personal vehicles should consider instituting a mileage reimbursement policy for 2010 and adopting a good mileage log reimbursement form for employees.
Employers should consult the IRS website for more information on the mileage reimbursement guidelines.
Employee and New Company Found Not Liable in Trade Secrets Case
A Fairfax County Circuit Court has found in favor of an employee and his new employer who were sued for misappropriation of trade secrets, among other claims, when the employee went to work for a direct competitor and took a customer list and vendor contact sheet with him. In the case of Tryco Inc. v. U.S. Medical Source, et al., Brian Thomas (“Thomas”) worked for the Plaintiff (“Tryco”), which was in a niche government contracting industry selling dental and medical supplies to the U.S. government under a Decentralized Blanket Purchase Agreement (“DBPA”). Thomas’s sister-in-law decided to get a DBPA and she started a company which sold dental and medical supplies to the government. Thomas left Tryco and went directly to work for his sister-in-law’s new company, U.S. Medical Source (“USMS”).
Upon leaving to work for the new company, Thomas did not tell Tryco that he was going to work for a direct competitor, and when he downloaded a number of personal items from his work computer onto a flash drive, he copied a contact list and vendor list along with his personal files. Tryco sued everyone involved, including Thomas, USMS, Thomas’s sister-in-law and Thomas’s brother who helped out at USMS from time to time.
After a four day bench trial, the Court found in favor of all the Defendants. Specifically, the Court found that neither of the lists taken by Thomas had independent economic value because:
- The customer list was mostly outdated, and the information on the list (names and telephone numbers of government contracting officers) could be readily obtained through legitimate means – such as using the list of contacts provided to the Defendants by the government; and
- The names and contact information for the companies on the vendor list could be readily obtained simply by looking up the companies on the internet. Therefore, the Court found that Plaintiff could not meet its burden under the Virginia Uniform Trade Secrets Act (“VUTSA”).
In addition, the Court found Thomas’s testimony to be credible that he inadvertently took the two files at issue, rather than misappropriating them for some improper means. This finding was bolstered by the fact that Thomas returned the entire flash drive as soon as he was notified of the issue by Tryco’s counsel, and just days after leaving Tryco’s employ; that he did not disclose any of the information to his new employer; and that, as a factual matter, Thomas knew all of the information on the two documents given that he had interfaced with the government contracting officers and the various vendors routinely as part of his work for Tryco.
At this point (if it had not occurred to you sooner), you may be asking why the employer just did not sue Thomas for breach of his non-competition agreement since he went directly from his employment with Tryco to work for a competitor. The answer is that Thomas was never required to sign a non-compete agreement; so he was free to compete and did so accordingly.
Even If Not Subject To Federal Law, Virginia Small Businesses May Still Be Prohibited From Discrimination Under Virginia Law
Although employers with less than 15 employees are generally not subject to federal discrimination statutes such as Title VII and the Americans with Disabilities Act, Virginia small businesses may still find themselves subject to Virginia’s discrimination laws even if they have fewer than 15 employees.
The Virginia Human Rights Act, which applies to Virginia businesses with more than 5 but less than 15 employees, makes it unlawful for a Virginia employer to discharge an employee on the “basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions,” or age (if the employee is over 40). An employee may file a lawsuit against an employer for an alleged violation of the Virginia Human Rights Act in either a general district court or a circuit court, provided the employee files the action within 300 days from the date of termination. (If the employee files a complaint with a human rights agency or commission within 300 days of the termination date, then the employee may bring a court action within 90 days from the date the commission or agency has rendered a final ruling on the complaint.) Employers who are found to have violated the Virginia Human Rights Act may be liable for the employee’s attorneys’ fees and up to 12 months of back pay with interest.
Under the Virginians with Disabilities Act, it is unlawful for employers of all sizes to “discriminate in employment or promotion practices against an otherwise qualified person with a disability solely because of such disability.” To comply with the Virginians with Disabilities Act, an employer must make a “reasonable accommodation to the known physical and mental impairments of an otherwise qualified person with a disability, if necessary to assist such person in performing a particular job, unless the employer can demonstrate that the accommodation would impose an undue burden on the employer.” Under Virginia disability law, whether an accommodation would impose an undue burden on an employer depends on a variety of factors such as potential hardship on the employer, the size of the facility where the employment occurs, the nature and cost of the accommodation, and safety and health considerations. (For Virginia employers with less than 50 employees, any accommodation that would exceed $500 is presumed to impose an undue burden.) Employers who are found to have violated the Virginians with Disabilities Act may be subject to an injunction (to enjoin the violation) or ordered to pay the employee compensatory damages and attorneys’ fees.
Virginia business owners should visit the Virginia Human Rights Council’s website for more information regarding the Virginia Human Rights Act and the Virginia Department of Rehabilitative Services' website for additional information pertaining to the Virginians with Disabilities Act.
Fourth Circuit Court Of Appeals Sends Sexual Harassment Suit To Trial
In EEOC v. Fairbrook Medical Clinic, a Title VII sexual harassment case in which the Equal Employment Opportunity Commission (EEOC) brought a lawsuit on behalf of a woman doctor against her former employer, the Fourth Circuit Court of Appeals (4th Circuit) reversed the district court’s grant of summary judgment and remanded the case to the district court for trial. The 4th Circuit determined that the defendant employer’s alleged conduct, if proven true, was severe enough to alter the conditions of the plaintiff employee’s employment and create an abusive work environment.
According to the summary judgment record, the plaintiff employee was subjected to nearly four years of harassment by the owner of a family medical center. Throughout the duration of her tenure with the defendant employer, the owner of the medical center (who was also the plaintiff employee’s immediate supervisor) created a hostile work environment by: routinely making vulgar and sexually graphic comments to the plaintiff employee; repeatedly showing the plaintiff employee an x-ray of his torso, which included an image of what he called “Mr. Happy;” openly discussing with the plaintiff employee his sex life and bragging that his wife was “nice” and “tight” because she had a c-section instead of vaginal delivery; and, telling the plaintiff employee’s patients, in her absence, that they could follow up with the plaintiff “when she returns from screwing.” Additionally, during the plaintiff employee’s pregnancy and continuing after her return from maternity leave, the defendant employer commented on the size of the plaintiff employee’s breasts and offered to help her pump them. After assisting the plaintiff employee with a contract dispute with a vendor, the defendant employer told the plaintiff employee that she owed him and asked, “Are you going to let me help you pump [your breasts]?”
Although the plaintiff employee frequently told the defendant employer that his comments were inappropriate as well as discussed the harassment with the office manager and personnel manager, no investigation or corrective action was taken. Accordingly, the plaintiff employee resigned from the defendant employer and took a new position.
Shortly after resigning, the plaintiff employee filed a charge with the EEOC and the EEOC filed a lawsuit alleging that the plaintiff employee was subjected to a hostile work environment because of her sex in violation of Title VII of the Civil Rights Act of 1964. The district court granted the defendant employer’s motion for summary judgment. On appeal, the 4th Circuit reversed the district court finding that the EEOC had raised a triable issue of fact with respect to each element of its hostile work environment claim.
In reversing the district court, the 4th Circuit focused on whether the offending conduct was sufficiently severe or pervasive to alter the conditions of the plaintiff’s employment and create an abusive work environment. (To be actionable under Title VII, the sexual harassment must be objectively hostile or abusive, and the victim must subjectively perceive it as such. The severity must be judged from the perspective of a reasonable person in the plaintiff’s position and a court must consider all circumstances including the frequency of the conduct, its severity, and whether it unreasonably interferes with an employee’s work performance.)
In considering the defendant employer’s argument that the offensive comments were not made because of the plaintiff’s sex and, instead, were made to men and women alike, the 4th Circuit held that the defendant employer’s use of “sex-specific and derogatory terms” indicated that he intended to demean women and that a reasonable jury could infer that the comments “would not have been made to someone of the same sex.”
The Court also rejected the defendant employer’s argument that, the conduct at issue, when viewed in its social context, was not severe but constituted simple teasing, off-color jokes, and off-hand comments. Based on the record before it, the Court concluded that the conduct was more than general crudity and that the allegations, if proven, show that the defendant employer targeted the plaintiff with highly personalized comments designed to demean and humiliate her. Also, the Court noted that the severity of the defendant employer’s conduct was exacerbated by the fact that he was not only the plaintiff’s immediate supervisor, but also the sole owner of the medical center. As such, he had significant authority over the plaintiff on a daily basis and the ability to influence her career.
Furthermore, the 4th Circuit found unpersuasive the defendant employer’s argument that the conduct was neither frequent nor severe because it did not cause the plaintiff employee to miss work due to stress or otherwise adversely affect her job performance. With respect to the frequency, the Court held that a reasonable person could conclude that comments once or twice a week was a persistent feature of the plaintiff employee’s work environment. Regarding the severity, the Court held that the critical inquiry is not whether the plaintiff employee’s work was impaired, but whether her working conditions were discriminatorily altered. Given that the defendant employer “bombard[ed] her with graphic and highly personalized comments about intimate features of his and her anatomy,” a jury could find that the plaintiff employee’s working conditions were in fact discriminatorily altered. (The Court also noted that the plaintiff employee withstanding the harassment until a new job became available does not, “without more,” defeat the plaintiff employee’s Title VII claim.)
This case, as if further proof is needed, illustrates the advantage that employers have on sexual harassment and discrimination claims in the 4th Circuit (which includes Virginia, Maryland, and North Carolina). Although the 4th Circuit remanded the case to the district court for trial, it is important to note that the district court had initially ruled in the employer’s favor on summary judgment. While Virginia employers should take some comfort with how courts construe Title VII cases, they should also recognize that there are circumstances in which the conduct is so egregious that a court may side with an employee. As such, Virginia businesses must ensure that they have a process in place to address allegations of harassment or discrimination seriously and expeditiously.
Virginia Federal Court: Title VII Native Corporations Exception Does Not Apply to Indirect Subsidiary in Racial Discrimination Case
The Eastern District of Virginia, Alexandria Division, recently decided a case of apparent first impression involving the Native Corporations exception to Title VII’s prohibition on unlawful employment practices. The Court concluded that there were too many layers of ownership between the employer defendant and the exempt Native Corporations company, and thus, the race discrimination case against it could go forward to trial.
In Tony Fox v. Portico Reality Services Office, a former foreman at Portico’s Manassas, Virginia office alleged he was treated differently from other non-African-American employees. During his employment with Portico, he claimed that he was the subject of numerous offensive racial remarks, was not given a regularly-scheduled pay raise like other employees, and was eventually discriminatorily fired from his job.
Portico requested summary dismissal of the discrimination claim on the basis that it was a wholly-owned, indirect subsidiary of NANA Regional Corporation, an Alaskan Native Corporation. Certain groups and entities, such as Indian tribes, private membership clubs and Alaska Native Corporations are not considered to be “employers’ under Title VII’s statutory definition, and thus, are not subject to its prohibitions. Alaska Native Corporations play special roles in controlling lands and funds for Alaskan Natives, and the underlying purpose of its exception was to permit hiring favoritism toward Alaska Natives without violating Title VII.
Here, Portico is an Alaska limited liability company, but with its principal place of business in Virginia. Portico’s sole member, Qivliq LLC is a wholly-owned subsidiary of NANA Development Corporation. NANA Development is a wholly-owned subsidiary of NANA Regional Corporation - the Native Corporation. In interpreting the statute narrowly, the Court ruled that the Native Corporation exception applies to subsidiaries only where the Native Corporation directly owns the subsidiary.
It is important to note that Section 1981 of the Civil Rights Act of 1866, which provides a separate and independent basis for relief for race discrimination in private employment, contains no similar exception for Alaska Native Corporations. Thus, even Native Corporations and their direct subsidiaries may be held liable under this statute.
EEO Guidelines for Small Businesses with Federal Contracts
Small businesses with Federal contracts have to be especially mindful of ensuring compliance with equal employment opportunity (EEO) requirements. The failure to comply with the EEO guidelines set forth in Executive Order 11246 (which prohibits employment discrimination by Federal contractors and subcontractors as well as federally-assisted construction contractors and subcontractors) may very well result in the cancellation of a contract, termination, suspension (in whole or in part), or the debarment of the contractor. As the Office of Federal Contract Compliance Programs (OFCCP) requires contractors to engage in their own internal EEO compliance analysis, small businesses often run afoul of satisfying their obligations under Executive Order 11246.
To ensure compliance with the basic EEO requirements imposed by Executive Order 11246 -- and to avoid the wrath of the OFCCP – contractors should adhere to the following OFCCP guidelines:
Don’t Discriminate! Contractors must refrain from engaging in workplace employment discrimination on the basis of race, color, religion, sex, or national origin. Although most people think of intentional discriminatory acts, employment discrimination can also arise when a neutral policy or practice has an adverse impact on the members of any race, sex, or ethnic group.
Post an EEO Poster. Federal contractors must post OFCCP’s EEO poster in a location that is easily seen (e.g., a lunchroom, break room, or locker room).
Include an EEO Tag Line in Employment Advertising. Contractors should include a sentence in all solicitations and advertisements for employment stating that “all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin.”
Keep Records. Contractors must maintain their personnel records and employment records including job descriptions, job postings, job offers, applications and resumes, interview notes, tests and test results, written employment policies and procedures, personnel files, and time-keeping records.
Develop and Maintain an Affirmative Action Program. Contractors with 50 or more employees and a contract of $50,000 or more must develop and maintain a compliant affirmative action program (AAP).
Small businesses with Federal contracts should regularly review their EEO policies and procedures to ensure that they are compliant with Executive Order 11246. Certainly, given the potential penalties, it is better to be safe than sorry!
Proposed EEOC Rule on ADEA Defenses
A proposed rule introduced by the Equal Employment Opportunity Commission (EEOC) on February 18, 2010, if adopted, will provide guidance and meaning to the “reasonable factors other than age” defense in the federal Age Discrimination in Employment Act (ADEA).
The ADEA, unlike Title VII, states that it is not unlawful for an employer to take an action “otherwise prohibited” by the statute against an employee where “the differentiation is based on reasonable factors other than age” (RFOA). The Supreme Court interpreted this provision in Smith v. City of Jackson and Meacham v. Knolls Atomic Power Laboratory, which involved disparate impact discrimination claims.
The Supreme Court in Smith held that employees bringing claims under the ADEA can rely on the disparate impact theory, and thus, proof of age-motivation is not required. The Smith decision also stated that employers can defend such a case based on a reasonable factor other than age; however, the Court did not provide which party had the burden of persuasion on this issue. Subsequently, in Meacham, the Supreme Court held that the employer - not the employee - has the burden of proving the RFOA defense.
The EEOC’s proposed rule seeks to provide guidance on what constitutes “reasonable factors other than age” consistent with the decisions in Smith and Meacham. It’s non-exhaustive list of relevant factors to be considered in determining whether an employment practice is reasonable are as follows:
-- Whether the employment practice and the manner of its implementation are common business practices;
-- The extent to which the factor is related to the employer’s stated business goal;
-- The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
-- The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
-- The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
-- Whether other options were available and the reasons the employer selected the option it did.
It is important to note that this standard is lower than Title VII’s business-necessity test but higher than the Equal Pay Act’s “any other factor” test.
The EEOC is accepting public comment on the proposed rule until April 19, 2010.
Fourth Circuit: Testimony of Other Women in Sexual Harassment Case is Admissible
In a recent decision, the Fourth Circuit Court of Appeals affirmed the trial court’s admission of testimony by female employees, other than the plaintiff, regarding their own experiences of sexual harassment by the defendant. The Court stated that such testimony is often relevant to a plaintiff’s hostile work environment claim and the employer was not unfairly prejudiced – even though the testimony did not in any way involve the actions of the defendant against the plaintiff.
In King v. McMillan, a former deputy in the Sheriff’s Office for the City of Roanoke, VA alleged that the Sheriff sexually harassed her. Other women testified at trial that the defendant made inappropriate sexual remarks to them as well, asked for kisses and hugs, and touched them in ways that made them feel uncomfortable. The Court determined that the testimony of the other women was relevant to two elements in a hostile work environment claim: (1) whether the defendant’s unwelcome conduct toward the plaintiff was because of the plaintiff’s sex, and (2) whether the unwelcome conduct toward the plaintiff was sufficiently severe or pervasive to create a hostile work environment.
The important aspect of this decision is the determination by the Fourth Circuit that the evidence was relevant and its admission was not a violation of Rule 403 of the Federal Rules of Evidence, which excludes relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. The appeals court noted that proper jury instructions were provided on this issue and unfair prejudice was further avoided by only admitting testimony of harassment that occurred during the same timeframe of the plaintiff’s employment. Thus, the Sheriff’s Office was not able to limit the evidence to matters involving the plaintiff. The trial court specifically acknowledged that disaggregating the experience of its employees was not the law.
What can you do to prevent a sexual harassment claim against your company? In addition to establishing and implementing a comprehensive sexual harassment policy, you and your human resources department should learn to recognize the patterns of sexual harassment. As was apparent from this case, some harassers are adroit at protecting themselves from disclosure and rely on threats or rewards to prevent complaints. Regular training of all employees and establishing clear communication lines for employees to report behavior anonymously will certainly assist in preventing such legal entanglements.
Does your Company Have an Inclement Weather Policy?
With forecasts for the Northern Virginia region calling for nearly two feet of snow, many Virginia business owners will have to decide whether to take a “snow day.” For small businesses in particular, this decision is confounded by operational and logistical factors, including the absence of a means to timely communicate with employees (to advise them of a closing) and the potential disruption to critical business processes. Instead of playing the “should I close” decision by ear, businesses should take the proactive step of adopting an inclement weather policy.
Corey Riley, the facility administrator of DaVita Dialysis in Arlington, recommends that small businesses identify in advance which employees are critical to sustain business operations. “Given the nature of our business and that, for our customers, our services are literally a matter of life or death, we cannot afford to make decisions at the last minute. It is important that each of our employees knows precisely what to do well in advance of a winter storm,” said Riley. “On occasions like this weekend, we will rent an SUV and then have a team member pick up the employees who are essential to the operation of the center.”
“The safety of each employee should be a primary consideration in a company’s inclement weather policy,” said Talulla Newsome, a recent retiree and the former head of Colgate Palmolive’s Global Technology Center in Piscataway, New Jersey. “The policy should be flexible enough to allow employees to make a decision that is best for their own personal circumstance. Most importantly, regardless of the policy, there must be open communication between each employee and the employee’s direct supervisor.”
So what should your inclement weather policy consist of? In reality, there isn’t a “one size fits all” answer to this question. However, every inclement weather policy should:
- State that it is the company’s policy to remain open during inclement weather and that employees should make every reasonable effort to get to work (or telecommute if the company has a telecommuting policy in place).
- Detail how and when the company will communicate closings or delayed openings to employees.
- Address potential issues relating to hourly employees, such as whether they will be paid (or disciplined) for not reporting to work when the business is open.
For business continuity and employee safety, every business should have an inclement weather policy in place. Once a policy is in place, make sure that it is kept up-to-date and that it is regularly communicated to employees.
IRS Announces Standard Business Mileage Reimbursement Rate for 2010
Employers should take notice that the Internal Revenue Service (IRS) has announced a standard business mileage reimbursement rate of 50 cents per mile for 2010. The business mileage reimbursement rate is used by many employers for computing the appropriate employee reimbursement amount in instances where an employee uses a personal vehicle for a work-related purpose. The new mileage reimbursement rate, which takes effect on January 1, 2010, represents a significant decrease from the rate set by the IRS in 2009 of 55 cents per mile.
Employers with an established personnel policy should update their employee handbooks by year-end to reflect this change. Those employers who do not have an established policy for reimbursing employees for business miles traveled in personal vehicles should consider instituting a mileage reimbursement policy for 2010 and adopting a good mileage log reimbursement form for employees.
Employers should consult the IRS website for more information on the mileage reimbursement guidelines.
FLSA Compliance of Employer Intern Programs
In today’s tough economic environment, employers are looking for creative ways to reduce their overhead. And, what could be more appealing than an unpaid intern who can assist with getting the work done? With this year’s financial crisis, there is no shortage of such labor for employers. Many people are willing to work for little or no compensation in order to prevent a big gap of employment or build a resume. However, unpaid interns can create legal troubles for the unwary business owner. Federal labor laws governing internships provide that the relationship has to benefit the intern more than the company. If it doesn’t, then the employer must comply with the Fair Labor Standards Act (“FLSA”) by paying minimum wages and possibly overtime.
As many employers already know, there are many advantages to using an intern. If you are faced with a tight budget for personnel, interns may help fuel growth for your company. But, you need to be sure that your main purpose for hiring an intern isn’t to avoid paying wages. The U.S. Department of Labor’s Wage and Hour Division outlined a list of criteria to determine whether a trainee or intern is an “employee” under the FLSA, and thus, must comply with Federal wage laws.
The following criteria provide guidance in evaluating internship programs for for-profit organizations, but it is important to note that each program is unique and must be carefully examined:
- the training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
- the training is for the benefit of the trainee;
- the trainees do not displace regular employees, but work under close observation;
- that the employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;
- the trainees are not necessarily entitled to a job at the completion of the training period; and
- the employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.
If your company’s internship program does not satisfy all of the above criteria, your interns may be considered “employees” under the FLSA. Hiring an intern, which qualifies as an “employee” may cost your company thousands in unpaid wages and legal fines. So, how do you ensure compliance? Establish a written internship program outlining the terms and structure of the relationship in a way that the intern is receiving the full benefit of the learning experience, and ensure that your managers and other employees properly implement it.
Business Law News Bites
Here is a quick summary of some interesting blogs I have read this week on a variety of business law topics that may be of interest to Virginia businesses:
Brian Hill, of the Employer Lawyer Report, analyzes how Facebook’s new privacy controls will impact the employer-employee relationship. According to Hill, these new privacy control measures could make it more difficult for employers who use Facebook to monitor their employees.
Robin Roberts, of the Startup Lawyer Blog, provides some guidance on how equity should be divided amongst co-founders of a startup company. The primary method described by Roberts is to base the equity split on an assessment of the past, current, and future contributions of each co-founder. Regardless of the method used, Roberts advises that co-founders make the equity-split determination quickly and that they consider vesting founders’ stock over a period of time.
Joshua Heslinga, of the Virginia IP Law Blog, writes that it makes good business sense to enforce your patents before they are reexamined by the United States Patent and Trademark Office (USPTO). As Heslinga notes, the timing of a reexamination decision (where a patent is reexamined by a patent examiner to verify a patent’s validity) can be a crucial determining factor in the outcome of a patent litigation case. If a reexamined patent is determined to be invalid, then that will almost certainly result in the dismissal of a pending patent infringement litigation action.
Joel Greenwald, of the Overtime Advisor Blog, details potential issues an employer may face for having employees work through lunch. According to Greenwald, employers that require "non-exempt" staff (e.g., receptionists, data entry clerks, administrative assistants, secretaries, billing clerks, customer service representatives, etc.) to work during their unpaid break time could face substantial liability under the Fair Labor Standards Act (FLSA). Under the FLSA, non-exempt employees must: (1) be paid for every hour they work; and (2) have all hours worked count towards their potential overtime pay. The website for the Virginia Department of Labor and Industry has a good FAQ section on wage payment issues in Virginia.
Michael Stocker, of the Eyes On Wall Street Blog, discusses a proposed bill by Senator Christopher J. Dodd (D-Conn.), Chairman of the Senate Banking Committee, that would overhaul the U.S. financial system. Senator Dodd’s financial reform plan bill would, among other things, consolidate bank regulators, create a consumer financial protection agency, and impose new restraints on exotic financial instruments and credit rating agencies.
The Genetic Information Nondiscrimination Act Requires New Employment Posters for Businesses
As of No
vember 21, 2009, businesses are required to display a new federal poster in the workplace which reflects the requirements of the Genetic Information Nondiscrimination Act (“GINA”). GINA was signed into law in May 2008 to address concerns over the use of genetic information in the health insurance industry and the acquisition and use of such information by employers. Proponents of the law urged that this legislation will allow Americans to freely undergo genetic testing for diseases, such as cancer, heart disease, and mental health conditions without fear of losing their job.
GINA regulations apply to all private, state, and local government employers with 15 or more employees. Some states already have genetic information nondiscrimination laws, but the terms and application of those laws vary greatly. Pursuant to GINA, businesses may not intentionally acquire genetic information from applicants, employees or even former employers (with very limited exceptions). In addition, the law prohibits employers from using this type of information for any decision regarding the terms of employment, including hiring, firing, and promotion decisions.
The new “Equal Opportunity is the Law” poster is available on the EEOC website in English, Spanish, Arabic and Chinese. This poster also reflects the 2008 amendments to the Americans with Disabilities Act. To obtain free copies of other federal required posters, you should contact the U.S. Department of Labor at (202) 693-0200 or visit DOL’s website.
While GINA seeks to encourage increased genetic testing, which will make it more likely for researchers to come up with lifesaving therapy for disease, its application may catch businesses by surprise. Most companies assume that the law doesn’t apply to it because they don’t actively collect genetic information on their employees or applicants. However, the law defines genetic information broadly and includes information on illnesses obtained through family histories. Thus, it could be problematic to the company that has such information and inadvertently uses it.
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