| Legal Updates
HOTTEST LEGISLATIVE, REGULATORY AND
LEGAL ISSUES FOR DECEMBER 2011
Legislative and Regulatory Developments
Private sector employers were originally required to post the new NLRB employee rights poster by November 14, 2011. This deadline has now been extended to January 31, 2012.
- Other NLRB Actions Causing Political Turmoil
The NLRB has in the recent past implemented the above rule requiring a new posting requirement; proposed rules to greatly expedite union representation elections, to the benefit of unions; applied new remedies against employers in unfair labor practice cases; and pursued litigation against the Boeing Co. for placing new manufacturing jobs in South Carolina instead of at a unionized plant in Washington. Employer groups and conservative politicians, particularly from the south, have reacted with great fervor to these changes. Possible results of these actions may be decreased or limited funding for the NLRB and filibusters in the Senate to block additional Democratic nominees to the Board.
- HHS Can’t Implement Long-term Care Component of PPACA
The Patient Protection and Affordable Care Act (“PPACA”) requires the Department of Health and Human Services (“HHS”) to establish a national long-term care program by which a basic lifetime benefit of at least $50 per day would be established. On October 14, 2011, the HHS stated in a letter to Congress that this program is not workable and that it cannot be implemented.
- IRS and DOL Agree to Share Information on Worker Misclassification
On September 19, 2011, the Internal Revenue Service and the U.S. Department of Labor entered into a memorandum of understanding to allow these two agencies to share information and coordinate enforcement efforts relative to employers that are misclassifying individuals as independent contractors when they should be classified as employees.
- IRS Provides Guidance on Tax Treatment of Cell Phones
IRS Notice 2011-72 states that when an employer provides an employee with a cell phone primarily for non-compensatory business reasons, the value of the non-business use of the cell phone by the employee will generally not be considered to be taxable income to the employee. At the same time, the IRS issued a memo to its tax examiners, telling them that where an employer provides cash allowances and reimbursements to employees for the business use of their personal cell phones, such payments are also not taxable.
- Michigan Public Sector Labor Bills Enacted
House Bill 4152 (P.A. 54 of 2011)
This bill was enacted on June 8, 2011, going into immediate effect as Public Act 54 of 2011. It establishes that when a collective bargaining agreement (“CBA”) has expired and no replacement has been negotiated, “a public employer shall pay and provide wages and benefits at levels and amounts that are no greater than those in effect on the collective bargaining agreement’s expiration date.” It specifically bars the payment of any step wage increases after a CBA expires. It also prohibits any retroactive pay or benefit increases, either through a voluntary agreement between the parties or by an arbitration award.
Increases in premiums and illustrated rates for health, dental, vision, prescription “or other insurance benefits” under a CBA would be fully borne by bargaining unit employees if the agreement expires without a new one taking effect, starting with the first plan year beginning on or after January 1, 2012.
Senate Bill 7 (P.A. 152 of 2011)
This bill was enacted on September 27, 2011, going into immediate effect as 2011 P.A. 152. It requires that all public employers choose one of the following options relative to the portion of their employee health insurance costs to be paid by them:
(1) A hard dollar cap, in which the public employer must not, in the aggregate, pay more than $5,500 per year for single coverage; $11,000 per year for two-person coverage; and $15,000 per year for family coverage.
(2) By a majority vote of its governing body, a public employer may choose a cap equal to 80% of the aggregate premium costs for its employees’ health insurance coverage.
A public employer may allocate its payments for medical benefit plan costs among its employees and elected officials “as it sees fit.”
These requirements do not apply to a CBA in effect on September 15, 2011 until that contract expires. However, the requirements apply to any extension or renewal of the contract. A local unit of government (a city, county, village or township) may exempt itself from the requirements of the proposed Act each year by a two-thirds vote of its governing body.
- Workers Compensation Reform Bill Introduced (House Bill 5002)
On September 22, 2011, House Bill No. 5002 was introduced with proposed amendments to the Worker's Disability Compensation Act. This bill, if enacted, would substantially reduce the benefits paid to injured workers, saving Michigan employers significant amounts of money. This bill has been referred to the House Committee on Commerce.
Recent Cases of Interest
- FLSA Anti-Retaliation Provision Does Not Apply to Applicants
The 4th Circuit Court of Appeals, in Dellinger v Science Applications International Corp, 649 F.3d 276 (4th Cir. 2011), ruled that the anti-retaliation provision of the FLSA does not make it illegal for a prospective employer to retaliate against a job applicant because the applicant filed an FLSA action against a former employer. In reaching this conclusion, the court held that the FLSA, unlike other statutes, only bars discrimination or retaliation against an “employee.” The NLRA, by comparison, makes it an unfair labor practice to retaliate against applicants as well as current employees.
If the company at issue in this case had hired the applicant and then discharged her for her prior activity, the result would have been different.
- ADA Discrimination by Association Claim Denied by the Sixth Circuit
A Plaintiff sued under the Americans with Disabilities Act claiming that he was discriminatorily terminated because his wife was disabled and the employer feared that he would be distracted at work on account of his wife’s disability. The Sixth Circuit affirmed the lower court’s dismissal of the case because the employer presented significant facts showing poor job performance and the plaintiff failed to put forward any facts supporting his claim that his termination was motivated by his association with a disabled person. Importantly, the court stated in Stansberry v Air Wisconsin Airlines Corporation (6th Cir 7/6/11),
Assume, for example, that an applicant applies for a job and . . . discloses that his or her spouse has a disability. The employer believes the applicant is qualified for the job. The employer, however, assuming without foundation that the applicant will have to miss work or frequently leave work early or both, in order to care for his or her spouse, declines to hire the individual for such reasons. Such a refusal is prohibited by [the ADA]. In contrast, assume that the employer hires the applicant. If he or she violates a neutral employer policy concerning attendance or tardiness, he or she may be dismissed even if the reason for the absence or tardiness is to care for the spouse. The employer need not provide any accommodation to the nondisabled employee.
- NLRB Sues Nonprofit for Firing Five Employees after Posting Complaints of Working Conditions on Facebook
Hispanics United of Buffalo, a nonprofit organization, fired five non-union employees after they commented on another employee’s Facebook post, which stated that these five employees did not do enough to help the organization’s clients. These five employees posted responses defending their job performance, criticizing working conditions and raising workload and staffing issues. The NLRB Complaint alleged that the Facebook discussion was a protected concerted activity within the meaning of Section 7 of the National Labor Relations Act because it involved a conversation among co-workers about their terms and conditions of employment.
The ALJ heard the case and issued a decision on September 2, 2011 ordering that Hispanics United reinstate the five employees and award them back pay because they were unlawfully discharged. The ALJ found that employers cannot prohibit employees from communicating through social media sites about work-related matters of mutual concern.
- Elliott-Larsen and Vicarious Liability
On July 29, 2011, the Michigan Supreme Court decided whether an employer may be held vicariously liable for an employee’s criminal conduct that may have also violated the Elliott-Larsen Civil Rights Act. In Hamed v Wayne County, 490 Mich. 1 (2011), a Wayne County deputy sexually assaulted an inmate after placing her in a jail cell. The inmate sued the employer and employee under Elliott-Larsen alleging that she was subjected to sexual harassment. The Michigan Supreme Court held that, except in rare circumstances, such as when an employer has notice of the employee's propensity to commit the particular misconduct, or when the misconduct is committed within the scope of the employee's employment, an employer is not vicariously liable for quid pro quo sexual harassment committed by its employees.
For additional
information on these developments, please contact Kevin McCarthy
at mccarthy@mccarthysmithlaw.com
or by phone at (269) 488-6330. |
