Author: James Hatch

SK Foods, located in California’s San Joaquin Valley, is a grower of tomato and vegetable products with thousands of employees. Former employee Robin Brewer filed suit against SK Foods and its president, Scott Salyer, pursuant to the Racketeer Influenced and Corrupt Organizations Act, or RICO, alleging that the defendants had knowingly hired illegal workers to depress the wages of legal workers.

    The U.S. District Court for the Eastern District of California in Sacramento held that Brewer’s lawsuit adequately alleged claims for violations of the Immigration and Nationality Act’s prohibitions on knowingly hiring, and therefore alleged racketeering activity necessary to proceed with a RICO claim.

    The court found that to state a RICO claim, Brewer must allege the conduct of an enterprise through a pattern of racketeering activity causing injury to the plaintiff and other legal workers. The court held that a violation of the INA can be considered an act of racketeering activity, also called a predicate act , where at least two predicate acts within a 10-year period are alleged.

    Brewer alleged that the Social Security Administration often notified SK Foods that large numbers of its employees were using false Social Security numbers, and that the company permitted those workers to continue working under new identities. Brewer thereby alleged the predicate acts by saying Salyer and the company had knowledge that the aliens were undocumented. Brewer v. Salyer, ED Cal., No. 1:06 cv01324 (5/17/07).

    Impact: Employers who hire immigrants with no lawful authorization to work in the U.S. are at risk with such claims. Employers are advised to carefully review and ensure their compliance with applicable regulatory requirements that detail pre-hire screening of job applicants to ensure they are lawfully entitled to be employed in the United States.

Workforce Management, July 23, 2007, p. 10 — Subscribe Now!

Michelle Freadman, an insurance company manager, was diagnosed with ulcerative colitis and took medical leave from her job with Metropolitan Property & Casualty Insurance Co. in Rhode Island. Freadman returned to work and was permitted to work part time. In 2000 she was assigned to a high-profile project and, although she was not asked to do so, began working long hours, including nights and weekends.

    One week before a major presentation, Freadman told her supervisor that she was working too hard and “needed to take some time off because [she was] starting not to feel well” and “some of [her] symptoms may be returning.” The supervisor asked her to take time off after the presentation. After Freadman failed to follow instructions, the project was assigned to another lower-level manager and she began working at home, at first on an authorized and then an unauthorized basis.

    Freadman sued the company under the Americans With Disabilities Act and the equivalent state law on the grounds that the company had excluded her from the client presentation. A district court granted summary judgment against the employee on all claims. The U.S. Court of Appeals for the 1st Circuit in Boston affirmed the trial court’s decision.

    While the appeals court agreed that a request for time off or to work at home may constitute a requested accommodation, Freadman failed to show that she put the company “on notice of a sufficiently direct and specific” request for her desired accommodation. The court explained that Freadman had failed to clarify that she needed time off immediately. Freadman v. Metropolitan Prop. & Cas. Ins. Co., 1st Cir., No. 06-1486 (4/18/07)

    Impact: To avoid disputes about the nature of requested accommodations, it is suggested that, when requests for time off or job reassignments are made, employers require employees to specify, in writing, the nature of the request.

Workforce Management, June 25, 2007, p. 18 —Subscribe Now!

 

Cesar Martinez Corral, an undocumented worker illegally employed in Kansas, filed a claim with the Kansas Department of Labor to collect unpaid wages earned from his job with Coma Corp. The agency awarded Corral the full amount he was owed, plus interest, and a civil penalty imposed by the Kansas Wage Payment Act in an amount equal to the unpaid wages.

   A Kansas district court reversed the Labor Department’s award, in part holding that although the state’s Wage Payment Act applies to undocumented workers, he was only entitled to the applicable minimum wage because the employment contract was illegal because of his undocumented status.

   In reversing the district court’s holding, the Kansas Supreme Court rejected the employer’s argument that, because Corral was undocumented, federal immigration law pre-empts state law claims for unpaid wages. The court concluded that federal immigration policy is furthered by enforcement of the state wage law because it eliminates an incentive for hiring illegal workers if employers know they must pay them properly.

   The court also concluded that the worker was entitled to an award of wages in accordance with the oral employment contract and that he was entitled to the civil penalty. The court held that the state’s policy of protecting wages and wage earners would be directly contravened by denying or diluting an action for wages earned but not paid on the grounds that such employment contracts are illegal. The court recognized that the Kansas Wage Payment Act is “plain and unambiguous” and does not carve out any “illegal alien” exception. Coma Corp. v. Kansas Dep’t of Labor, Kan., No. 95,537 (3/23/07).

    Impact: Employers are advised that state wage/hour laws may not be pre-empted by federal immigration law. Employers who hire illegal workers may be liable to those illegal workers under applicable state wage laws in the same way as to legal workers.

Workforce Management, June 25, 2007, p. 18 —Subscribe Now!

John Paul Murphy, an employee of Kenneth Cole, an upscale retail clothing chain, filed a complaint with the California Labor Commissioner for missed meal and rest periods and unpaid overtime. California law provides, in Labor Code 226.7, that if an employer fails to provide a meal or rest period, the employer must pay the employee one additional hour of pay at the employee’s regular pay rate for each day the meal or break is not provided.

Kenneth Cole appealed, raising issues regarding Murphy’s workplace classification—that he was a nonexempt employee, and that payments for meal and rest break violations were a penalty rather than a wage, and thus Murphy’s claims were barred by the applicable one-year statute of limitations.

The California Supreme Court unanimously held that the remedy provided in Labor Code 226.7 constitutes a wage or premium pay that is governed by a three-year statute of limitations, as opposed to a one-year statute of limitations for penalties.

The Supreme Court noted that meal periods and rest breaks “have long been viewed as part of the remedial worker protection framework” and that “due to a lack of employer compliance, the [Industrial Welfare Commission] added a pay remedy to the wage orders” for such violations. Therefore, “payment owed pursuant to section 226.7 is akin to an employee’s immediate entitlement to payment of wages or for overtime.” Murphy v. Kenneth Cole Productions Inc., 40 Cal. 4th, 1094 (4/16/07).

Impact: The court’s decision underscores the importance of ensuring that employers’ meal and rest break policies comply with applicable law, as well as the importance of ensuring those policies are being followed by all employees.

Workforce Management, May 21, 2007, p. 6 — Subscribe Now!

Susan Baldwin, a marketing representative for Blue Cross/Blue Shield of Alabama, claimed her supervisor, Scott Head, used profanity on almost a daily basis, called women “babes” and “bitches” and referred to marketing representatives in vulgar terms. Head also propositioned her on two occasions and played with his zipper in front of her.

Several months later, following Baldwin’s first complaint to the company’s human resources department, Blue Cross investigated and interviewed Head and other employees, none of whom corroborated Baldwin’s allegations, but which confirmed that Head had used profanity. The company did offer to hire an industrial psychologist to assist Baldwin and Head with their interactions, and when Baldwin indicated that she could not work with Head, she was offered a transfer, which she rejected.

In affirming summary judgment for the employer, the U.S. Court of Appeals for the 11th Circuit in Atlanta held that “the complainant does not get to choose the remedy,” and she refused to take advantage of the reasonable corrective measures offered by the company. Baldwin failed to report her allegations promptly, as required by her employer’s anti-discrimination policy, and refused to accept a counseling plan or a transfer from the Huntsville office to one in Birmingham, 100 miles away.Baldwin v. Blue Cross/Blue Shield of Alabama, 11th Cir., No. 05-15619 (3/19/07).

     Impact: Employer policies should afford employees multiple avenues for employees to complain about harassment and discrimination issues. It is equally important that employers promptly investigate such complaints and respond with appropriate remedial actions as warranted.

Workforce Management, May 21, 2007, p. 12 —Subscribe Now!

Do heatlh benefit plans that do not cover prescription, over-the-counter or surgical methods of contraception used by men or women unlawfully discriminate because of sex?

    That was the situation courts were confronted with when female employees of Union Pacific Railroad asserted that the company’s health benefit plans, which excluded coverage of contraception, violated Title VII of the 1964 Civil Rights Act and the Pregnancy Discrimination Act of 1978.

    Deciding an issue of first impression among the federal courts, the U.S. Court of Appeals for the 8th Circuit in St. Louis held that Union Pacific’s policy restricting coverage of contraception, unless medically necessary, was not sexually discriminatory because it restricts coverage of all contraception devices used by men and women.

    The court reasoned that the exclusion was not discriminatory because the “health plans do not cover any contraception used by women such as birth control [pills], sponges, diaphragms, intrauterine devices or tubal ligations, or any contraception used by men, such as condoms and vasectomies.”

    According to the court, the Pregnancy Discrimination Act and legislative history do not mention contraception whatsoever, and contraception is not related to pregnancy in the ways indicated by the Pregnancy Discrimination Act. Further, the court reasoned that like infertility treatments, contraception is a treatment that is only used prior to pregnancy. In re: Union Pac. RR Employment Practices Litig., 8th Cir., No. 06-1706 (3/15/07).

    Impact: Companies may exclude health care coverage for contraceptives if the policy is equally applied to men and women.

Workforce Management, April 23, 2007, p. 8 —Subscribe Now!

The city of Marion, Indiana had a collective bargaining agreement with American Federation of State, County and Municipal Employees Local No. 3063 that permitted drug testing of workers. The city unilaterally adopted a new policy that required random drug testing for all employees performing duties related to the safe operation of city equipment, and instructed all sanitation department employees, except a secretary, to take a drug test. One employee, Robert Krieg, refused and was fired.

    Affirming the dismissal of Krieg’s legal challenge to that decision, the U.S. Court of Appeals for the 7th Circuit in Chicago held that the city had a special need for random drug testing. While drug testing is a search within the meaning of the Fourth Amendment, the Supreme Court held in Nat’l Treasury Employees Union v. Von Raab (489 U.S. 656, 1989) that random testing is constitutionally permissible if it serves special governmental needs. Von Raab said that courts must balance individual privacy expectations against governmental interests and determine whether it would be impractical to require a search warrant or individualized suspicion before allowing random testing of a government employee.

    Under this test, random drug testing of employees in the rail, highway and motor transportation industries and for heavy equipment operators has been approved by the courts.

    Because Krieg’s job responsibilities involved driving large equipment on city streets, the court concluded that any reasonable jury would consider that his job duties contained a risk of injury to others. The 7th Circuit also concluded that Krieg’s expectation of privacy was diminished because he had been subjected to drug testing in the past. Krieg v. Seybold, 7th Cir. No. 06-2322 (March 21, 2007).

    Impact: Drug testing of government employees must be based on special governmental needs and balanced against individual privacy rights to avoid a Fourth Amendment violation.

 

Does an employee displaying health-related problems and who provides his or her employer with sufficient notice of a serious health condition qualify for the protections of the Family and Medical Leave Act?

   That was the situation the court was confronted with when David Burnett, an employee at a Chicago-based property management company in a position that required heavy lifting, had not yet been diagnosed with prostate cancer in 2003 but had disclosed, over a four-month period, a series of health problems to his employer. Burnett was discharged in early 2004 because of alleged poor job performance caused by his illness.

   The Court of Appeals for the 7th Circuit in Chicago recognized that a bare assertion of sickness is insufficient to receive the FMLA’s protections and that the Americans With Disabilities Act did not apply in Burnett’s case. But the court ruled that Burnett’s series of disclosures of health problems to his employer were sufficient to proceed with allegations that Burnett’s employer had interfered with his rights and retaliated against him by firing him when he attempted to leave work one day. Burnett v. LFW Inc., No. 06-1013 (7th Cir. December 26, 2006).

    Impact: Firing an employee who discloses a serious health-related problem may violate the FMLA. Consideration should also be given to applicable state employment discrimination laws to make sure that there are no similar prohibitions against discharging employees who disclose a series of health problems.

Workforce Management, March 12, 2007, p. 8 — Subscribe Now!

Requiring a full medical release before allowing an employee to return to work may violate the Americans with Disabilities Act (ADA). That was the court’s decision in a lawsuit brought by Todd Wright against his former employer, Middle Tennessee Electrical Membership.

    Wright, who had suffered a serious work-related knee injury, alleged that the company failed to accommodate him and provide him with light duty work. His doctor had released him to work with restrictions, but the company’s policy precluded employees from returning to work until they had a full medical release. No offers of light duty employment were made by the company for two months, until Wright filed a discrimination charge with the EEOC.

    It was undisputed that the company would not consider an injured employee for any job until the employee had a full medical release. According to the court, requiring a full release from a medical doctor prior to returning to work might be tantamount to an impermissible “100 percent healed policy,” which violates ADA.

    In ordering a trial on Wright’s claims under the ADA, the court noted, “[w]hale an employer is not required to create a light duty position where none exists and the ADA permits job requirements that are job-related and consistent with business necessity, a ‘100 percent healed’ or ‘fully-healed’ policy is per se a violation of the ADA.” Todd Wright v. Middle Tenn. Elec. Membership Corp., No. 3:05-cv-00969 (M.D. Tenn. Dec. 7, 2006)

    Impact: Employers are advised that when considering the return to work of employees on medical leaves of absences, reasonable accommodation may be required in the event the returning employee is unable to perform all of the job duties of their former position.

Five deaf job applicants brought a class-action suit against UPS and claimed that the company had excluded them for consideration for jobs driving trucks with a gross vehicular weight of less than 10,001 pounds. The U.S. Department of Transportation requires that drivers of vehicles weighing at least 10,001 pounds pass certain hearing standards. Drivers who drive trucks less than 10,001 pounds are not subject to the regulation.

UPS argued that to prove disability discrimination, deaf workers were required to demonstrate an ability to drive safely.

The U.S. Court of Appeals for the 9th Circuit agreed that UPS violated the Americans With Disabilities Act by using qualification standards to screen out deaf individuals. The court held that UPS did not satisfy the burden of proof to show that application of a Department of Transportation hearing standard for jobs driving smaller vehicles was job-related and consistent with business necessity. Bates v. United Parcel Serv. Inc., 9th Cir. Ct. App., No. 04-17295 (10/10/06).

Impact: Employers are advised to carefully examine any broad qualification standards for particular jobs and to individually evaluate workers’ abilities to perform their jobs.