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Legal Briefs for HR

Posted on October 14, 2013

Welcome to Legal Briefs for HR, an update on employment issues sent to over 5000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have been given permission to republish content via their newsletters and websites), to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in!  Back issues are posted at under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.”  

The weather may be cooling off, but here’s what’s heating up for you:

1. Shut Up – The federal government shutdown is impacting employers in many ways, including these examples:

1. DHS announced on October 1 that E-Verify will be unavailable during the shutdown.  The three-day rule for E-Verify users is suspended, but employers must still complete the Form I-9 on all new hires no later than the third day on the job. If you are mandated to use E-Verify, make a note in your I-9 files that E-Verify was not timely run due to the government shutdown, as that note may prove handy in a subsequent audit.  The time period allotted to resolve Tentative Nonconfirmations (TNCs) will be extended and the days of government closure will not count toward the eight government workdays the employee has, to go to SSA or contact DHS to resolve the issue. Federal contractors using E-Verify are directed to contact their contracting officer to ask about extending deadlines.

2. All but eleven employees at the NLRB are on furlough.  Per their Contingency Plan for Shutdown in The Absence of Appropriations, representation elections will not take place as scheduled during the shutdown (which raises all sorts of interesting issues relating to eligibility to vote if/when the “payroll eligibility date” moves and new hires/ discharges occur during the interim). Representation elections and hearings scheduled for October 1 to 11 are postponed indefinitely.

3. EEOC is accepting charges but they will not be investigated upon receipt.  Mediations and hearings will be rescheduled.

4.OFCCP is completely shut down as all workers are deemed “non-essential.”  There’s a joke in there, somewhere.

5. OSHA is mostly shut down with a skeleton crew in most offices to deal with life and death situations (e.g., workplace fatalities, claims of imminent danger). States that have their own OSHA program are still up and running.


2. School Daze– With the kiddos back in class, don’t forget that many states offer job-protected leave to parents and guardians of children, to participate in their kids’ school-related activities.  The specifics vary wildly, from state to state, as seen in these examples:

1. CA – Applies to employers of 25+ employees per location; available to parent, guardian or grandparent having custody of a child  in grades K through 12 or attending a licensed daycare; offers up to 40 hours per year

2. CO – Applies to employers of 50+ employees; available to non-executive and non-supervisory employees to attend K – 12 parent-teacher conferences & other school-related activities; offers up to 18 hours per academic year

3. DC – Applies to all employers; available to biological parents, persons with legal custody, persons who act as a guardian (even if not appointed legally), aunts/uncles/grandparents, and spouses of any these listed persons; offers up to 24 hours in a 12-month period

4. IL – Applies to all employers; offers up to eight hours per year

5. LA – Applies to all employers, but is permissive and not mandatory; offers up to 16 hours during any 12-month period

6. MA – Applies to employers which are subject to FMLA (ie., 50+ employees); offers 24 hours in a 12-month period

7. MN – Applies to employers of 21+ employees; offers 16 hours in any 12-month period

8. NV – Applies to employers of 50+ employees; offers four hours per school year

9. NC – Applies to all employers; offers up to four hours per year

10. RI – Applies to employers of 50+; offers10 hours in any 12-month period for employees who have been employed by the employer for at least 12 consecutive months

11. VT – Applies to employers of 15+; offers four hours in any 30-day period and can’t exceed 14 hours in any 12-month period


3. Hairy Situation– The EEOC is suing an insurance claims company for rescinding a job offer to a customer service rep when it realized the new hire had dreadlocks, in violation of their grooming standards.  The EEOC is claiming that the policy and its application to the new employee is discrimination against African-Americans based on physical and/or cultural characteristics.  EEOC v. Catastrophe Management Solutions, Inc. (S.D. Ala. 9-13).

4.She’s Got the Look– Retailer Abercrombie & Fitch has been on the losing end of several Title VII disputes over its “Look Policy” which blocked employment of Muslim teens who wore head scarves (hijabs) for religious reasons, since the Policy says “no caps.”  As part of settling several of these suits, the store added an appeals process,  manager training and now tells applicants that accommodation to its “Look Policy” may be available.  The “rock and a hard place” employers often find themselves in, of not being allowed to inquire about religious matters but possibly being found liable for a failure to accommodate such unknown beliefs, has been addressed in yet another A&F case.  In this case, a 17-year old girl applied for a Model job in a Tulsa, OK store.  She wore a hijab to her interview, was not given a job offer and the EEOC sued on her behalf.  The lower court granted summary judgment to the EEOC, finding that A&F engaged in religious discrimination.  The appeals court went in the opposite direction and granted summary judgment to A&F. The 10th Circuit noted that the managers who interviewed the young lady had no knowledge that she wore the hijab for religious reasons and she not had not informed them of that fact. They further noted that an applicant or employee may engage in a practice that is associated with a particular religion, but does so for cultural or other reasons that are not grounded in religion.  The EEOC argued that the employer should have to reasonably accommodate if it is put on notice by the worker “or some other source” but the Court tightened the screws and said the applicant or employee “ should not be able to impose liability on the employer for failing to accommodate his or her religious practice on the ground that the employer should have guessed, surmised or figured out from the surrounding circumstances, that the practice was based upon his or her religion and that the plaintiff needed an accommodation.”  EEOC v. Abercrombie & Fitch (10th Cir. 9-13).

5. A Taxing Matter – The Supreme Court will soon weigh in on a split in opinion among the circuit courts, to determine whether or not severance payments made to employees who are discharged from employment are “wages”  which are  subject to FICA withholding.  The 6th Circuit said “no” but the Federal Circuit says “yes.”  And the IRS says “yes” too (of course).  The Supremes have accepted cert on United States v. Quality Stores, Inc. (6th Cir. 9-12).  Employers in the 6th Circuit (KY, OH, MI and TN) have filed refund claims on the portion of FICA they paid on behalf of displaced workers, using IRS Form 941-X. The limitations period for 2010 quarterly tax payments ends on April 15, 2014 so employers who will be due a refund if the Supreme Court sides with the 6th Circuit should file for refunds to preserve their claims.  If you did and your claim was disallowed, consider using IRS Form 907 to extend the time frame for filing a refund suit, if necessary.

6. Whistling All the Way to the Bank – On October 1, 2013, the SEC announced its largest award of $14 million to a single, anonymous whistleblower.  The two prior bounties paid under the Dodd-Frank Act had been roughly $50,000 (one person) and up to $125,000 (three persons).  These big bucks awards tend to pique the interest of others in pursuing a similar payday, so check and recheck your compliance if you are a publicly-traded company with shares registered with the SEC.  When announcing the mega-award, the SEC Chair said “Our whistleblower program already has had a big impact on our investigations by providing us with high quality, meaningful tips.  We hope an award like this encourages more individuals with information to come forward.”  Oh yes she did.

7. Take a Knee – Employee has osteoarthritis in her knee and asks her employer to provide a free and reserved parking spot up nice and close to the door.  Employer declines and she is let go about five months later for substandard work.  She sues under the ADA, claiming both a failure to accommodate and retaliatory discharge for filing her EEOC charge.  The lower court grants summary judgment for the employer, finding that the denial of on-site parking did not limit her ability to perform the essential functions of her job.  The 5th Circuit, however, affirmed the dismissal of the retaliation claim but reversed and remanded on the failure to accommodate.  Neither party disputed that she was a qualified individual with a disability.  The parties differed on what the employer might be required to do.  The Court determined that accommodation need not be limited to facilitating essential functions and quoted from the regulations which explain that a reasonable accommodation may include “making existing facilities used by employees readily accessible to and usable by individuals with disabilities.” Feist v. State of Louisiana (5th Cir. 9-13).

8. Fair WARNing – There is a growing line of case law holding private equity firms liable when a portfolio company shuts down and fails to comply with the employee and local government notices required under the WARN Act.  In the most recent case, a plastic components manufacturing company shut down and laid off employees in Fort Smith, AR without providing any WARN notice to them.  The employees sued the shuttered employer and the private equity firm which had invested in the business. The judge certified a class of 91 employees and rejected the private equity firm’s motion to dismiss, which argued that they were not an “employer” under WARN.  This court, and several others, have accepted and applied the Department of Labor’s regulations which list five factors used in determining if two or more entities should be treated as a “single employer” for purposes of WARN liability.  The upshot is that most have said that a private equity firm may be a de facto employer, based on how the business/investor relationship is managed in light of the five factors – [1] common ownership; [2] common directors and/or officers; [3] de facto exercise of control; [4] unity of personnel policies emanating from a common source; and [5] dependency of operations. In this case, the court took particular notice that [1] the private equity firm was sole owner of Fortis; [2] the firm had “a continuous presence” at the plant and ordered the closing; [3] the firm was paid a $500K annual fee to manage Fortis; and [4] the firm’s employees supervised the plant’s managers.  The private equity firm’s motion to dismiss was denied even though the court held that only two of the five factors in the DOL’s balancing test (i.e., ownership and de facto control) had been satisfied. Young v. Fortis Plastics LLC (N.D. Ind. 9-13).

9. Blame it on Yoga and Yogurt – Employee is an insurance salesperson who uses her personal vehicle for business purposes, such as sales calls and business development.  Employee attends a company-sponsored program and then heads for home at the end of the day.  Employee decides to stop for a frozen yogurt and a yoga class on the way home.  On the way to the yogurt shop, she hits a motorcyclist.  The motorcyclist sues the employee and her employer.  The lower court OKs the employers motion for summary judgment to be removed from the case because employee was not in the course and scope of employment when the crash occurred. Court of Appeal reverses, holding the employer responsible.  How?  It starts with respondeat superior (aka “let the master answer) which is a doctrine that makes an employer vicariously liable for its employees’ torts, if committed within the course and scope of employment.  There is a “ coming and going” rule which briefly states that employers are not liable for acts occurring while the employee is commuting to and from work.  But there is also an exception to the “coming and going” rule referred to as the “required vehicle” exception, which can apply when the employer realizes a benefit from use of the employee’s vehicle such as when use of the vehicle is a job requirement or where the employee agrees to that arrangement.  The court took notice that employee used her personal car two to five times a week for job-related trips.  The planned stop for froyo/yoga was seen as both foreseeable and a “minor deviation” that did not affect the benefit employer enjoyed by not maintaining company cars for employees’ business use.  The employee had just left a business meeting and was set to visit with a client, first thing the next day.  Moradi v. Marsh USA Inc. (Cal Ct. App. 9-13).

10. Stated Differently– Here are some hot topics for you multi-state employers:

1. California – The state minimum wage will rise from $8 to $9 per hour on July 1, 2014 and to $10 per hour on January 1, 2016.  The California Family Rights Act (CFRA) currently provides paid leave to eligible workers to care for their seriously ill spouses, domestic partners, children and parents.  Effective January 1, 2014, expand that list to include the employee’s siblings, grandparents, grandchildren and parents-in-law.

2. Connecticut –Effective October 1, 2013, employers have new obligations when an employee asks to see his or her personnel file. Under the revised law, employers must grant such access within seven business days for a current employee and within ten business days for a former worker, if the request was received within one year of the termination of employment.  Other new requirements include:

1. Giving employees a copy of any written disciplinary action within one business day of imposing the discipline;

2. Giving discharged employees a copy of any documentation of the discharge, immediately; and

3. Amending disciplinary notices with language informing the employee of his or her right to submit a written statement, if he or she disagrees with the write-up, and such rebuttal will become a part of the employee’s file and will be transmitted along with any copy of the disciplinary notice

3. Maryland –The following new laws took effect on October 1, 2013:

1. Pregnancy Accommodation – Employers are to accommodate an employee with a disability  caused or contributed to by pregnancy or childbirth, so long as the accommodation does not cause an undue hardship.  Suggested accommodations include changing duties or work hours, providing mechanical or electrical aids, transfer to a less strenuous position during pregnancy and providing leave. The new law requires employers to post a notice in the workplace and include information in the handbook, advising employees of their right to reasonable accommodation and leave for a disability caused or contributed to by pregnancy.  The MD Commission on Civil Rights has not offered a poster yet and suggests that employers make their own, using the language in the statute.

2. Employees may file a lien for unpaid wages against an employer’s real or personal property and the definition of an “employer” includes individuals.  See LB4HR #8 -2013 for more details.

3. Employers of 50+ employees must allow a day off for employees with an immediate family member who is leaving for or returning from active duty outside of the U.S. as a member of the U.S. armed forces.  In order to be eligible for the day off, the employee must have worked for the employer for at least 12 months AND worked at least 1250 hours in the 12 months immediately preceding the day off.  “Immediate family members” means the employee’s spouse, parent, stepparent, child, stepchild or sibling.

4. Employers may not require reimbursement or deduct from a tipped employee’s pay for customers who “dine and dash.”  New law applies to any employee who customarily and regularly receives more than $30 per month in tips and gratuities. The law also requires a posted notice that is not yet available.  See item 1., for what to do about that!

4. New Jersey – See LB4HR #8-2013 for details of the Security and Financial Empowerment Act (SAFE Act), which took effect on October 1, 2013 and provides job-protected leave for certain victims of domestic violence and sexual assault.  There is poster requirement and the notice was recently made available at

5. New Jersey/Jersey City– Effective January 24, 2014, employers operating in Jersey City must provide sick leave to employees who work at least 80 hours per year.  Employees will accrue one hour of sick leave for every 30 hours worked, up to an annual cap of 40 hours.  Exempt workers are presumed to work 40 hours per week.  The time off will be with pay for employers of 10+ employees and unpaid (unless the employer chooses to offer pay) for smaller employers.  The sick pay rate must be the greater of the employee’s normal rate of pay or the State minimum wage rate (currently $7.25/hour). The accrual of time off begins upon hire but employees are not eligible to use the days until 90 calendar days after employment begins.  The time off is available for the employee’s own illness/injury or to care for a family member, to include the employee’s children, parents, spouse, grandparents, grandchildren, siblings and the spouse or domestic/civil union partner of the employee’s parent or grandparent.  “Spouse” is defined as meaning anyone to whom the employee is legally married in NJ or any other state.  Unused time off is not paid out upon termination of employment unless the employers’ policy/contract requires such payment. Employees rehired within six months of discharge have their unused accruals, if any, reinstated.  Documentation of work hours and paid sick time taken must be maintained by the employer for three years.  Employers will be required to provide employees with individual written notice and display the poster provided by Jersey City’s Department of Health & Human Services. The poster is TBA.

6. New York City– Effective January 30, 2014, employers of 4+ employees must provide for reasonable accommodation of pregnant workers for the purpose of ensuring and maintaining a healthy pregnancy without fear of negative job implications.  The new law also requires covered employers to provide written notice of rights to newly hired employees and existing employees and such notice may be conspicuously displayed at the employer’s place of business.  The content of the notice is TBA.

11. For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State . . . Go Cats!), follow me on Twitter.  I’m at @amross.


Until next time,
Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP
600 Banner Place
12770 Coit Road
Dallas, TX  75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)

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