Thursday, 10 November 2011 00:00 PDF Print E-mail    

PayrollThe Arkansas Supreme Court recently answered a certified question from the United States District Court seeking a determination of the statute of limitations for violations of the Arkansas Minimum Wage Act (AMWA). The question is an important one because the statute on the AMWA does not have an express statute of limitations.

In Douglas v. First Student, Inc, Petitioners, who were all employed by Respondent as public school bus drivers or dispatchers, claimed that Respondent failed to compensate them for regular and overtime wages in weeks in which they worked more than forty hours. Petitioners filed a class-action complaint in federal district court, alleging violations of the federal Fair Labor Standards Act and the Arkansas Minimum Wage Act. Respondents opposed Petitioners' motion to amend their complaint, contending the amendment would be futile because Petitioners' AMWA claims were barred by the three-year statute of limitations set forth in Ark. Code Ann. 16-56-105.

Justice Gunter, writing for the Court, stated that the issue is: What is the appropriate statute of limitations for a private cause of action pursuant to A.C.A. §11-4-218(e)? The Arkansas Supreme Court determined that a three-year statute of limitations would apply to private causes of action brought pursuant to AMWA.

The Court revisited its holding in Miller Brewing Co. v. Roleson to clarify that the application of a five-year statute of  limitations period in that case was appropriate only because two conflicting limitation periods applied. Where two or more limitations period apply to a cause of action, the statute with the longest limitation period will be applied as a general rule.

Bottom line: A three-year statute of limitations will apply to private causes of action brought pursuant to AMWA.

 
Monday, 12 September 2011 00:00 PDF Print E-mail    

DictionaryThe Arkansas Supreme Court recently answered a certified question from a federal court regarding whether managers may be personally liable in retaliation cases brought under the Arkansas Civil Rights Act. The question is an important one because most courts have found that individuals are not liable for retaliation under Title VII of the Civil Rights Act, the federal discrimination law.

In Calaway v. Practice Management Service, Ms. Calaway complained to the office manager about sexually harassing comments from her physician-employer.  Calaway asserts that once the physician learned of Calaway’s complaints, he immediately terminated her employment.  

Calaway filed her lawsuit in federal court, alleging that she worked in a hostile work environment and that Practice Management and the physician retaliated against her.  Her lawsuit sought to hold Practice Management and the physician liable under Title VII and the Arkansas Civil Rights Act.

The Arkansas Supreme Court determined that the Arkansas Civil Rights Act allowed a person to be held individually liable for retaliation.  The Court reasoned that the section of the statute that concerns retaliation unambiguously refers to a "person."  The court looked to the plain meaning of the word "person" and interpreted it to mean an individual, thus creating individual liability for retaliation claims.

Bottom Line: Until the Arkansas legislature changes the state statute regarding retaliation, management and human resources employees could be personally liable for business decisions that create retaliation complaints.  Individual liability does not exist under Title VII, so it would be up to the Arkansas legislature to amend the Arkansas Civil Rights Act to bring it in line with federal law.

 
Tuesday, 19 July 2011 00:00 PDF Print E-mail    

PaystubThe Department of Labor has released the breakdown of its $103.3 billion 2011 budget, which includes a new multi-agency "Misclassification Initiative" that will strengthen and coordinate federal and state efforts to enforce labor violations that result from the misclassification of employees as "independent contractors."  The breakdown shows that the Wage and Hour division plans on hiring 90 full time employees during the 2011 fiscal year.  The Initiative will “strengthen and coordinate federal and state efforts to enforce labor violations that result from the misclassification of employees as independent contractors and to deter such violations in the future.”  The Initiative will also focus on the industries where such violations are the most common, such as, construction, home health care and business services.  

These issues are not just important at the federal level: Arkansas' Department of Workforce services also sent a notice to Arkansas employers outlining Arkansas' law regarding classification of independent contractors, and you can find that information here.  Additionally, Arkansas Business recently published two articles discussing the growing number of wage and hour claims that are being filed, particularly focusing on the issue of employee misclassification as independent contractors, which you can find here and here.

Employers should be concerned about these trends, if for no other reason than that wage and hour claims often present themselves as class action litigation, which is expensive to litigate.  It's my belief that wage and hour claims will continue to increase because of the complexity of the FLSA and the challenge that employers face in compliance. Employers should use the label "independent contractor" cautiously and not rely on this framework without legal review.

 
Friday, 08 April 2011 00:00 PDF Print E-mail    

CalendarIn a recent case, Frazier v. Vilsack, the Eighth Circuit upheld the dismissal of a Title VII racial discrimination case filed one day after the expiration of the statute of limitations.  This is a clear example of how seriously courts take deadlines.  In Frazier, the employee filed his lawsuit against a government employer 96 days after the EEOC mailed him the right-to-sue letter.  Under Title VII, an employee has 90 days from the time the notice is received to file suit against the employer.  The district court found that the right-to-sue letter did not arrive until five days after the date the letter was issued.  Therefore, the employee did not file his suit for 91 days, one day past the statute of limitations.  The Eighth Circuit noted that it was not clear whether Title VII’s statute of limitations were jurisdictional or an issue of equitable tolling, but that it did not matter.  One day late is still too late.  The employee tried to argue that he didn’t receive the right-to-sue letter until after March 18th, the day the trial court found the letter arrived, but could not provide evidence to support his claim.  He also argued that he did not always open his mail on the day it arrived, and therefore would not have had notice until after the 18th.  The Court held that such arguments had no impact on the statute of limitations. 

 
Tuesday, 22 March 2011 00:00 PDF Print E-mail    

TagsUSERRA is the statute that protects members of the military from discrimination in employment because of their service.  Experts estimate that there are 8,000 new USERRA claims filed every year, with the Department of Labor adding 1,389 cases in 2008 alone.  On March 1st, 2011, the Supreme Court issued its first ever decision on the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).

In Staub v. Proctor Hospital, the Court held unanimously for an employee that was a member of the Army Reserves.   The employee’s immediate supervisor (Malally), and Malally’s supervisor (Korenchuk) were, in the Courts words, “hostile to [the employee’s] military obligations.” The employee was fired by the hospital's Vice President of Human Resources (Buck), who did not have any anti-military prejudices, but relied on the advice of the two supervisors.  The employee then sued Proctor for violating his USERRA rights under the “cat’s paw” theory of liability.

"Cat’s paw” liability occurs when a decision maker is influenced by others that have discriminatory motives.  In this case, Malally was openly critical of the reservist's military commitments, telling the employee’s coworkers that his military service was a strain on the department, and he tried recruit at least one coworker to “help get rid of” the employee.   Korenchuk knew of Malally’s intentions to get rid of the employee, and he had personally been critical of the employee’s military service.  Finally, Buck relied on Mulally's statements in deciding to discharge the employee. 

At trial, the jury awarded the employee $57,640 in damages.  On appeal the Seventh Circuit reversed because Mulally and Korenchuk did not exercise a singular influence over the decision maker.  The Supreme Court disagreed.  First, the Court stated that USERRA only requires military service to be a motivating factor in the employment decision.  The Court went on to say that basic tort and agency principles apply to USERRA claims, rejecting Proctor’s argument that an employer should not be liable unless the de facto decision maker is motivated by antimilitary animus.  In short, Mulally and Korenchuk, acting in their official capacities, violated the employee’s USERRA rights, and Buck relied on their allegations in her decision to fire the employee, thereby violating the employee’s USERRA rights.

Bottom line: Employees who also serve in the military are protected for their time away from work for drills and for active duty. Employers who base employment decisions on this military service will likely find themselves defending those decisions, and this recent Supreme Court case will make those cases just a little easier for plaintiffs.

 
Friday, 25 February 2011 00:00 PDF Print E-mail    

Extended Family

Retaliation claims under Title VII recently became available to a new group of employees, including friends and family of employees who complain about discrimination. The United States Supreme Court unanimously held in Thompson v. North American Stainless that Title VII creates a cause of action for a third party who suffers some adverse employment action because of an association with an employee who complained of discrimination.

The facts of the case are simple: Thompson and his then fiancée (now wife) worked for North American Stainless (“NAS”).  The fiancée filed a gender discrimination complaint against NAS with the EEOC.  Three weeks after receiving notice of the fiancée’s complaint, NAS fired Thompson.  Thompson then sued NAS claiming that he was fired in retaliation for his fiancée’s protected activity, which was filing a gender discrimination complaint.

Justice Scalia, writing for the Court, stated that there were two question presented: First, did NAS’ firing of Thompson constitute unlawful retaliation? And second, if it did, does Title VII grant Thompson a cause of action?

With regard to the first question, Justice Scalia wrote, “Title VII’s anti-retaliation provision must be construed to cover a broad range of employer conduct.”  Furthermore, Title VII prohibits any employer from taking action that might dissuade a reasonable worker from making or supporting a charge of discrimination.  The Court stated, “We think it is obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew her fiancé would be fired.”

The Court then declined to identify a fixed class of relationships for which third-party reprisals are unlawful, stating that, “Title VII’s anti-retaliation provision is simply not reducible to a comprehensive set of clear rules.”

The second question raised by Thompson, whether the third party victim has a cause of action under Title VII, was more difficult, and revolved around that meaning of the word “aggrieved.”  The Court adopted the “zone of interest” approach.

Under the “zone of interest” approach, “a plaintiff may not sue unless he falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for the complaint.”  In other words, Mr. Thompson can sue for third party retaliation under Title VII because his employment was terminated by NAS, but a stock holder could not because her harm is not related to employment.

Bottom line: More employees are now eligible to bring retaliation claims, which are some of the hardest types of Title VII claims to defend. Employers should consider whether any adverse employment action creates the appearance of retaliation before moving forward with it.

 
Thursday, 11 November 2010 00:00 PDF Print E-mail    

US Supreme CourtOn December 7th, 2010, the United States Supreme Court will hear oral arguments on Thompson v. North American Stainless.  The facts of the case are simple: Thompson and his then fiancée (now wife) worked for North American Stainless.  The fiancée filed a gender discrimination complaint against Stainless with the EEOC.  The EEOC notified Stainless of the fiancée’s complaint, and Stainless fired Thompson three weeks later.  Thompson then sued Stainless claiming that he was fired in retaliation for his fiancée’s protected activity, which was filing a gender discrimination complaint.

Stainless moved for summary judgment, which was granted.  Thompson appealed.  The Sixth Circuit originally held in favor of Thompson, but on rehearing, reversed its previous decision, and held for Stainless, stating that it had no intention of becoming “the first circuit court to hold that Title VII creates a cause of action for third-party retaliation on behalf of friends and family members who have not engaged in protected activit[ies].”  Thompson then filed for Writ of Certiorari, which was granted.

Title VII makes it unlawful for an employer to fire an employee “because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.”  Stainless’ argument is that Thompson neither opposed Stainless’ discriminatory practices nor participated in his fiancée’s protected activities, and therefore has no cause of action under Title VII. Thompson’s argument is that allowing employers to target friends and family will have a chilling effect on employee’s protected activities.  Basically, you are less likely to report your sexually harassing boss if you know your best friend/spouse/parent/sibling will be fired because of it.  Nonetheless, if the Supreme Court recognizes this third-party cause of action, the pool of potential plaintiffs under Title VII becomes much larger.  Importantly for Arkansas, the Eighth Circuit has rejected third-party retaliation claims, but we should have a response from the Supreme Court sometime during the spring of 2011.

 
Monday, 13 September 2010 00:00 PDF Print E-mail    

football playersThe first cases decided under the amended ADA are beginning to appear, and, as expected, they don't look great for employers. In October of 2008, Congress passed the Amendments Act to the Americans with Disabilities Act (ADAAA), expanding the definition of disability. The new cases move away from the issue of whether the plaintiff is disabled and focus instead on whether the employer met its responsibility in the accommodation process.  Three recent cases illustrate this trend.     Jenkins v. National Board of Medical Examiners is the only ADAAA case that has been decided by a circuit court so far.  Jenkins was a medical student that had been diagnosed with a reading disorder at a young age.  Despite this disadvantage, he successfully completed high school, college and had reached his third year of medical school before his reading disorder presented an insurmountable challenge.  The National Board of Medical Examiners refused to provide Jenkins with additional time on an upcoming test.  Jenkins sued for injunctive relief.  At trial the court applied the old, more restrictive, standard and found that Jenkins was not disabled.  Jenkins appealed.  Before the Sixth Circuit heard the case, the new standard went into effect.  Because Jenkins was requesting relief for an ongoing harm, the Sixth Circuit applied the ADAAA and found that Jenkins was disabled.  Plaintiff wins.

In Grizzell v. Cyber City Teleservices Marketing, Inc., the employee was sent to the Philippines for job training where he witnesses the death of a young girl.  The experience traumatized the employee, who had previously been diagnosed with post-traumatic stress disorder (PTSD).  The employee told his employer that he might need treatment for PTSD, but the employer refused to accommodate the employee’s request.  A few weeks later, the employer fired him.  The employee sued; the employer filed a motion to dismiss; and the court held that PTSD is a disability under the ADAAA and the case should go to trial.  Plaintiff wins.

In Hoffman v. Carefirst of Fort Wayne, Inc., the employee was in remission after treatment for renal cell carcinoma and had been released for work with no restrictions by his doctor.  One year later, the employer changed the employee’s hours from 40 a week to 65-70.  When the employee told his employer that he could not work that long for health reasons and provided a statement from his doctor to that effect, the employer fired him.  Later, the employer called the employee, stating that he had not been terminated, and could work 40 hours a week, but could no longer work from home and must commute to a location an hour away.  The employee was not amused, and told the employer that because he had already been fired, he was not coming back to work under those conditions.  The employee then sued the employer for wrongful discharge under the ADAAA.  The employer filed a motion for summary judgment, claiming that the employee was not disabled.  The Court held that cancer in remission can be a disability, and held for the employee.  Plaintiff wins.

The score so far: Plaintiffs 3, Employers 0.  In every ADAAA case the courts have ruled on to date, in addition to the three discussed above, the employee has been found to be disabled.  This is a major shift for employers.  Employers now need to focus on the accommodation process and give real thought to whether an accommodation is available to assist an employee who has medical concerns.

 
Thursday, 08 July 2010 00:00 PDF Print E-mail    

I promise 10

"Promissory estoppel" can also mean trouble for employers.  Promissory estoppel   is the legal theory that if you make a promise to someone, and they rely on your promise and suffer some harm because of their reliance, then you could be liable for damages if you do not fulfill the promise. The 8th Circuit Court of Appeals recently considered this theory in relation to alleged promises made by a company's Human Resources employee. 

In Binkley v. Entergy Operations, an employee was terminated for falsifying timesheets.  It had been the employee's practice to fill out his timesheets before the beginning of the work week and then to make any corrections at the end of the week.  This method had been approved by the employee's previous supervisor.   After a change of supervisors, the employee was fired. 

At the time of his termination, the employee was told by a Human Resources representative that he could challenge his termination through a panel of employees or through his management team.  And, he was told that if either group agreed with the employee, he could be reinstated.  The employee was also told that the employee panel was unable to review disputes involving unethical or illegal conduct.  The employee chose to appear before the panel of employees, which sided with him.  However, the company’s Vice President determined that falsifying timesheets was unethical or illegal, and, therefore, outside of the panel’s authority.  The employee was not reinstated.

The employee sued under the theory of promissory estoppel and claimed that the review process was a promise that the employer would follow the decision of the panel and that he relied on the promise by not appealing up the line of management.  The 8th Circuit Court disagreed. 

The court said that it doubted that there was a promise at all, but more importantly that employee did not suffer a harm because of his reliance.  If the employee had appealed though the line of management, two of the three managers who would have reviewed his case were his immediate supervisor (who fired him) and the VP that refused to reinstate him after the panel issued its decision. Because it was unlikely that the outcome would have been different had employee chosen to appeal to management, he suffered no harm by not doing so.  

Bottom Line: Employers can be liable for promises on which an employee relies to his or her detriment.  Human Resources professionals can be the source of these types of promises and should be aware of the importance of promises, particularly when discussing offers of employment and terminations. 

 
Friday, 02 July 2010 00:00 PDF Print E-mail    

Medical Leave RequestI recently taught a semester of Employment Law at the UALR Bowen School of Law, and the most difficult topic for my very talented students seemed to be the intersection of the ADA, FMLA and Workers Comp statutes.  Most HR professionals would not be surprised by this observation because they struggle with these statutes on a daily basis. Well, it's all about to become even more complicated.

Several courts have recognized that time away from work can be a reasonable accommodation under the ADA. And, the recent amendments to the ADA suggest that the statute will cover many more employees.  The EEOC's website states it pretty clearly: "The Act emphasizes that the definition of disability should be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA and generally shall not require extensive analysis." 

This change will mean that employers will need to consider the ADA's impact on an employee's request for medical leave.  A recent article by Michael J. Lotito suggests that courts will often consider two questions, among others, when determining whether medical leave is a reasonable accommodation under the ADA: " (1) would the leave fulfill its medical purpose? (i.e., would the employee be able to perform the essential functions of his or her job upon return to work); and (2) would the employee's return to work be relatively close in time?"  Lotito correctly points out that no bright line exists where ADA accommodations are concerned, and that every request for leave should be examined individually. 

Although the EEOC's regulations interpreting the amended ADA were expected out this summer, it looks like they will be delayed.  In the meantime, employers should be aware that the amended ADA could affect the decisions that they make when granting or denying medical leaves.  

 
Tuesday, 18 May 2010 07:25 PDF Print E-mail    

Every state has a slightly different approach to employment law issues, and Arkansas is no exception. Here are a few questions that I am routinely asked by employers regarding the details of Arkansas employment law:

How often am I required to give my employees rest breaks or meal periods?
Breaks and meal periods are not required in Arkansas.  The state only requires that you pay employees for the time they work, and it does not require the employer to provide breaks.  Nonetheless, it's a very good idea for employers to give their employees some form of rest break or meal period, because they are, well, human.  If you do not intend to pay the employee during the break, be sure that the break is more than 20 minutes and that the employee is completely relieved of duties. Eating lunch at a desk while working is not a lunch break and must be paid.

Do I have to give an employee a notice of termination or a copy of his or her personnel file?
No. Neither is required by state or federal law.  Maintaining records regarding your reason for termination for two years is an excellent practice because you may be called on to explain your reasons for termination if an employee believes he or she has be discharged illegally.

Do I have to have a good reason to fire someone?
No, but.... Arkansas recognizes the at-will doctrine of employment, which allows an employer or an employee to end the employment relationship at any time for any legal reason.  However, you cannot fire an employee for an illegal reason, for example, because of the employee's race, gender, national origin, religion, disability or age. If you fire an employee for an arbitrary reason, you might find yourself explaining that decision to the EEOC.

Can I withhold an employee's paycheck until he or she returns my equipment?
No.  Arkansas law requires that an employer provide an employee's final pay at the next scheduled pay period, or within 7 days if the employee requests the payment. Don't mess around with paychecks!

Do I have to pay overtime if my employee works more than 8 hours in a day?
No. Arkansas only requires an employer to pay overtime when the work hours in a pay week exceed 40.

 
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