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EEOC Sues UPS Over Leave Policy, Firing of Worker With Multiple Sclerosis
The U.S. Equal Employment Opportunity Commission sued United Parcel Service Inc. on Thursday, August 27, alleging the packaging giant violated the Americans with Disabilities Act when it terminated an administrative assistant with multiple sclerosis.
The suit, filed in U.S. District Court for the Northern District of Illinois in Chicago, seeks class-action status on behalf of a class of disabled UPS employees whom the EEOC alleges were similarly unfairly treated under the company’s 12-month leave policy.
According to an EEOC press release, Trudi Momsen took a 12-month leave of absence from her job at UPS when she began experiencing symptoms of what was later diagnosed as multiple sclerosis.
She returned to work for a few weeks after the leave period was up, but soon thereafter needed additional time off after experiencing what she believed to be negative side effects of her medication. Although Momsen could have returned to work after the additional two-week leave, UPS fired her for exceeding its 12-month leave policy.
In the release, EEOC Chicago Regional Attorney John Hendrickson said that leave policies that set arbitrary deadlines for returning to work after medical treatment, such as those at UPS, “unfairly keep disabled employees from working. Sometimes a simple conversation with the employee about what might be needed to return to work is all that is necessary to keep valued employees in their jobs.”
The suit seeks back pay and compensatory and punitive damages for Momsen and a class of disabled employees whom UPS allegedly similarly refused to accommodate.
In a statement, UPS called the EEOC suit “surprising and misdirected.”
“The employee in this case never asked for an accommodation under the Americans with Disabilities Act. Following nearly a year’s leave of paid absence, she returned to work after being released to return to her regular job without restrictions,” UPS said. Then 18 days later, she “in essence, abandoned her position without ever providing management any medical documentation justifying additional time off.”
UPS described its 12-month leave policy as “one of the more generous and flexible leave policies in corporate America.”
The policy is not “automatic or absolute and exceptions may be granted when employees seek an accommodation under the ADA,” it said, noting that it has “many examples” of employees whose leave has been extended beyond 12 months.
UPS said it will “vigorously defend” its policy.
Filed by Sally Roberts of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Kennedy’s Legacy Includes Landmark Benefits Laws
Sen. Edward Kennedy, D-Massachusetts, the standard bearer for universal health coverage during his more than four decades in the U.S. Senate and whose legislative accomplishments had a huge influence on the design on employee benefit plans, died Tuesday evening, August 25, more than a year after he was diagnosed with a malignant brain tumor.
“An important chapter in our history has come to an end. Our country has lost a great leader who picked up the torch of his fallen brothers and became the greatest United States senator of our time,” President Barack Obama said Wednesday, August 26.
His legislative successes in the employee benefits arena are numerous and significant. He was a driving force behind the passage of legislation in 1978 that requires health care plans to provide the same coverage for maternity and childbirth as other medical conditions, a change that expanded benefits for millions of women.
In 1996, he played a key role in the enactment of legislation that curbed the use of exclusions of pre-existing medical conditions in health plans. That law makes it easier for employees to change jobs without losing coverage for current medical conditions.
His decision several years ago to invite business groups, insurers and mental health organizations to work together and develop mental health care benefits parity legislation was the starting point that led to the passage of a parity bill last year.
The strong support that developed and held firm behind the measure Sen. Kennedy championed ultimately led backers of a parity bill passed by the House to drop a provision—one vehemently opposed by employers—that would have required group health care plans to provide coverage for any mental condition listed in the psychiatric industry’s compendium of mental disorders.
The measure that ultimately passed goes into effect next year and will require group health care plans to provide the same coverage for mental disorders as other medical conditions, ending widespread discriminatory design practices.
While known for his soaring oratory, his success was due to his ability to negotiate and to compromise. The enactment of the portability bill had much to do with Sen. Kennedy’s decision to accept a Republican provision to allow employers to offer medical savings accounts—the predecessor to health savings accounts.
In his last major public address, which he made at the Democratic National Convention a year ago in Denver, he briefly but eloquently described one of his great passions in his 46-year career in the Senate: the need to expand health insurance coverage.
He said there was “new hope that we will break the old gridlock and guarantee that every American—north, south, east and west; young, old—will have decent quality health care as a fundamental right and not a privilege.”
Because of his illness, Sen. Kennedy was not an active player in the debate and passage of sweeping health care reform legislation in July by the Health, Education, Labor and Pensions Committee, the Senate panel he chaired.
Benefit lobbyists earlier said his illness was felt markedly as his successor, Sen. Chris Dodd, D-Connecticut, lacked Sen. Kennedy’s command of health care issues. Sen. Kennedy’s death could influence the outcome of the legislation, with the loss of a reform champion who also had the ability to hammer out compromises with opponents.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Maine High Court Rules Against Employer in Medical Fee Dispute
An employer must pay more generous medical provider fees available under Maine workers’ compensation law than available under the federal Longshore and Harbor Workers’ Compensation Act, even though employees received benefits under the federal law, the Maine Supreme Court has ruled.
Maine’s high court reached that conclusion Tuesday, August 18, in the case of St. Mary’s Regional Medical Center v. Bath Iron Works.
The ruling upholds a finding by a Maine Workers’ Compensation Board hearing officer who weighed two consolidated cases—one in which an employee suffered a neck injury in 2001, and another in which a worker suffered a back injury in 2003.
Both received treatment at St. Mary’s Medical Center, which billed BIW $31,417 for treating the neck injury and $75,179 for the back injury. But BIW paid St. Mary’s according to a Longshore Act fee schedule that allows only $13,566 for the neck injury and $24,633 for the back injury.
The hearing officer concluded that federal and state jurisdiction are concurrent on this issue and found no “authority that would bar a health care provider from seeking medical payments under state law when the employees chose to proceed under the federal act.”
BIW argued on appeal to the Maine Supreme Court that the comp board lacked jurisdiction because the Maine Workers’ Compensation Act of 1992 is not applicable when employees chose to proceed under the Longshore Act. But the court affirmed the hearing officer’s finding.
Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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CalPERS Sues Over California State Employee Furloughs
CalPERS is suing California Gov. Arnold Schwarzenegger over his state-imposed furloughs, claiming that the mandated three days of unpaid time off from work each month compromises the pension fund’s ability to meet its contractual obligations.
The $190.6 billion California Public Employees’ Retirement System, based in Sacramento, filed the lawsuit Wednesday, August 19, in state Superior Court in San Francisco, according to a news release.
CalPERS maintains that the furloughs hinder its ability to clearly reconcile investment trades, post collateral and monitor the activities of external investment managers for risk and compliance, the news release said. They also put the pension fund at risk of not providing timely disability and retirement checks and health care benefit services.
Rob Feckner, CalPERS board president, issued a statement arguing that the savings created from the CalPERS furloughs do not accrue to the state’s general fund.
“State law does not permit general fund budget problems to jeopardize the financial soundness of CalPERS or the benefits that we are obligated to pay retirees,” he said in the release.
Lisa Page, a spokeswoman for Schwarzenegger, said CalPERS should share the same sacrifices as the 200,000-plus other state government workers.
“Every California family and business has been cutting back, and state government has to do the same,” she said.
Filed by Pia Sarkar of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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QVC Suspends Employees Pending Investigation of 401(k) Hardship Withdrawals
Home shopping retailer QVC has suspended more than 200 employees at its Rocky Mount, North Carolina, distribution plant as it investigates whether the workers committed fraud in their 401(k) hardship withdrawal applications.
In an August 4 letter to suspended employees, Nick Brecker, vice president total rewards at QVC, said that his team had reviewed hardship withdrawal applications that came in from the center along with the company’s 401(k) administrator, Fidelity Investments, and determined that some applications “may not contain complete or valid supporting documentation, or we may have other questions about it.”
In the letter, Brecker advised those employees that they have two days to schedule an employment with a QVC Rocky Mount loss prevention specialist or an HR representative. “If you fail to schedule such appointment, we will accept your inaction as your decision to voluntarily resign your employment,” the letter states.
The letter goes on to explain that if the West Chester, Pennsylvania-based company determines that an employee committed fraud, they could be subject to “corrective action, up to and including possible termination of employment.”
Despite the investigation, the Rocky Mount plant is working at full capacity, said Tara Hunter, a QVC spokeswoman, in an e-mail.
“Every employee involved in the investigation will have an opportunity to meet with us to discuss the allegations, and all employees who are returned to work after the investigation will be made whole for any loss of scheduled hours,” Hunter said in the e-mail. “No determination has been made with respect to any employee at this time. Out of respect for the interests of all of our employees, we cannot provide any specific details of the investigation.”
Michael Shamrell, a Fidelity spokesman, referred calls to QVC.
Fraud in 401(k) hardship withdrawals is not uncommon, and companies would be wise to make sure they are really combing through these applications given the economic climate, says Rick Menson, an Atlanta-based partner at law firm McGuireWoods.
According to Watson Wyatt Worldwide, the percentage of companies that have seen 401(k) hardship withdrawals increase has jumped from 15 percent in October to 44 percent in April.
Companies need to audit 401(k) hardship withdrawals just as they do audits of health care plan beneficiaries, Menson said.
And if firms see a lot of these applications come from a specific region, that should prompt further investigation, he said.
“With the advent of electronic processing, people might think they can get things through,” he said. “Companies need to do audits.”
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Senate Confirms Sonia Sotomayor as First Hispanic on High Court
Sonia Sotomayor became the first Hispanic to ascend to the Supreme Court when she was confirmed by the Senate, 68-31, on Thursday, August 6.
Most recently a judge on the 2nd Circuit Court of Appeals, she will replace Justice David Souter, who retired this summer.
Souter was often part of the court minority on controversial employment law decisions such as the Lilly Ledbetter pay discrimination case two years ago and a suit this term involving white firefighters who were denied promotions in New Haven, Connecticut.
Sotomayor, 55, carefully navigated through her confirmation hearings in July, revealing little about how she might rule in any area. But she is likely to pick up where Souter left off on workplace cases, according to Kevin Shaughnessy, a partner at Baker Hostetler in Orlando, Florida.
“She’s going to take a more liberal viewpoint on employment issues,” Shaughnessy said. “I don’t see a sea change in the court’s employment law decision-making process. She’s essentially taking the place of a justice who would vote with the liberal bloc.”
In the firefighter case, Sotomayor participated in the three-judge panel that held that the city of New Haven could throw out the results of promotion tests because they would have elevated only white and Hispanic firefighters to the level of captain or lieutenant.
New Haven declined to certify the exams because of concerns that they were unfair to African-American candidates and could leave the city vulnerable to a lawsuit.
The Supreme Court ruled, 5-4, that New Haven could not discriminate against one group of workers—the white firefighters—to avoid discriminating against another: African-Americans.
The court held that the tests could be vitiated only if the city showed “a strong basis in evidence” that the exams were not job related or that another, less discriminatory test existed.
The case became a touchstone for critics of Sotomayor, who said during her hearings that she was following precedent. They said it was an example of the misguided emphasis that President Barack Obama put on the ability of judges to be empathetic to the plight of the disadvantaged.
“[E]mpathy is a fine quality,” Senate Minority Leader Mitch McConnell said in a floor speech before the Sotomayor vote. “But in the courtroom, it’s only good if the judge has it for you. What if you’re the other guy?”
But Sotomayor advocates said that her background was a strength and would give her a unique perspective on the high court.
“These core American ideals—justice, equality and opportunity—are the very ideals that have made Judge Sotomayor’s own uniquely American journey possible,” Obama said after the Senate vote. “They’re ideals she’s fought for throughout her career, and the ideals the Senate has upheld today in breaking yet another barrier and moving us yet another step closer to a more perfect union.”
The daughter of parents who came to the United States from Puerto Rico during World War II, Sotomayor grew up in a housing project in the Bronx in New York City.
Sotomayor, whose father died when she was 9, credits her mother with motivating her to succeed through education. She earned an undergraduate degree from Princeton and a law degree from Yale.
Over the course of her legal career, she served as prosecutor, a corporate litigator, and a trial and appellate judge. She presided over the case involving the Major League Baseball strike in 1995.
Senate Majority Leader Harry Reid, D-Nevada, said that Sotomayor’s cultural and professional background will benefit the Supreme Court.
“She’ll share the depth and breadth of that experience with her colleagues,” Reid said in a floor speech. “A more diverse Supreme Court is a better Supreme Court.”
But until one of the five justices who tend to vote in the majority leaves the bench, controversial employment cases are likely to be decided 5-4. The swing vote often belongs to Justice Anthony Kennedy, who wrote the firefighter decision this year.
“Kennedy seems to relish that role,” said Peter Mina, an associate at Tully Rinckey in Washington.
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One View ‘A Radical Rewrite’ of U.S. Employment Law
Randel Johnson, senior vice president of labor, immigration and employee benefits at the U.S. Chamber of Commerce in Washington, testifies several times a year before the Senate, most recently to voice opposition to proposed health care legislation that would require nearly all employers to provide some level of coverage to their employees.
“There’s a whole lot of employment laws pending on Capitol Hill,” Johnson says. “It may take six to seven months to get to the enforcement level, but it will get there. So pay attention. Change is coming.”
Here’s what else he had to say:
Crain’s Chicago Business: Why the big emphasis on labor law?
Randel Johnson: When the Democrats came back into power, we knew there was a change in philosophy from the previous administration and we expected they would revisit employer regulations. But even I’ve been shocked at the massive number of bills and what lies ahead, and it’s only a few months into the presidency. It’s a radical rewrite of American employee laws.
CCB: Why now, in the midst of a recession?
Johnson: It’s the wrong time to impose new mandates on employers, just as they’re digging out of a recession. But others would say the flip side is that this is when workers need additional rights. But it’s tough [for businesses] across the board.
CCB: And why so much change all at once?
Johnson: My view of these things is that Congress tends to look at each individual bill and doesn’t always look at the cumulative effect on businesses. It’s wrong to look at these things in isolation, which is what too often happens.
CCB: What would you support?
Johnson: I’d support federal regulations only when it’s been demonstrated there is a clear need, or when it’s written to eliminate any adverse impact on employment.
CCB: When do you expect movement on some of the pending legislation?
Johnson: Everything is jammed up behind the Employee Free Choice Act, and it will remain pending until EFCA is resolved or taken off the table.
CCB: What about smal1-business owners who don’t have the resources to ensure compliance?
Johnson: There are many business owners, especially small-business owners, who are overwhelmed by new regulations. You can whistle by the graveyard and hope you don’t get caught, but now there is a greater exposure to liability. For example, under civil rights laws today, the amount of damages [for infractions] are tiered based on the size of the business. But pending civil rights legislation would blow the caps off. So even small businesses would be exposed to large damage awards. And new OSHA legislation expands the penalties for all sizes of businesses.
CCB: What changes should employers expect in health care?
Johnson: It’s very likely that Congress will require employers to provide health insurance of some type to their employees or pay civil fines. It’s not clear how it will shake out, but I believe very small businesses will have a difficult time carving out the resources to provide coverage. I’ve testified against it because not all employers can afford to provide health insurance and not all can provide the level that’s required in the bill (as it’s written today). It’s a huge issue to the business community, particularly small businesses, which because of their size provide fewer benefits to employees.
CCB: Beyond legislation, what else is coming?
Johnson: Business owners should look for new regulations on ergonomics and more aggressive enforcement of the OSHA general duty clause that requires employers to provide a safe workplace. Look for more aggressive enforcement of overtime laws. And we are closely watching the effort of enforcement agencies to narrow the definition of who is an independent contractor. It’s not yet legislation, but believe me, it’s coming. Overtime and payroll taxes, in particular, will be areas of huge exposure.
What You Need to Know About the Card-Check Bill
The Employee Free Choice Act, a priority for labor leaders, modifies the National Labor Relations Act to make it easier for unions to organize employees.
Much of the controversy surrounding the bill is the card-check provision, which would award certification to a union in any workplace where more than 50 percent of employees sign a card stating that they’re in favor. Now, unionization requires a vote by secret ballot, which can happen when more than 30 percent of workers sign cards.
The Employee Free Choice Act was introduced in March and referred to the House Committee on Education and Labor. President Barack Obama has voiced his support. Observers expect some form of the act to pass before Labor Day, but not before another point of debate—binding arbitration—is resolved.
Under current law, unions and employers are obliged to bargain in good faith over labor contracts. The bill, however, says that if management and a newly created union can’t agree to a first contract within 120 days, a federal arbitrator can impose a deal. That contract would be binding for two years.
Some labor law experts and small-business owners say it’s unrealistic to hammer out a contract in such a short time, especially with a third party who might not know the business. And some owners fear the act could force terms they can’t afford.
“Binding arbitration takes the onus off the union to be a serious negotiator,” says Butch Bingham, president of Bulkmatic Transport Co., a Griffith, Indiana, company that faced a union drive five years ago. “It’s almost impossible to get a contract signed so quickly. Then some independent person will be deciding my economic package and whether or not my company survives.”
The bill also raises the penalties for unfair labor practices during a unionization campaign, such as intimidating workers or firing organizers. Current law requires that illegally fired workers be given back pay; the Employee Free Choice Act mandates triple back pay and a $20,000 fine per violation.
The National Labor Relations Board, which certifies unions, has jurisdiction over private companies doing business across state lines and meeting certain minimum sales levels, generally $500,000 for retail and $50,000 for nonretail. That means certain restaurants, catering companies, motels, franchises, health care facilities and retailers may no longer be off-limits to unions.
Seven New Labor Law Proposals to Keep an Eye On
Dozens of worker-friendly laws are making their way through the halls of Congress, including an unprecedented expansion of mandates on small employers, in some cases reaching businesses with as few as 15 employees.
New laws that expand employee rights “sound good and are friendly, but aren’t necessarily good for small businesses,” says Bruce Stickler, a partner specializing in employment and labor relations at Drinker Biddle & Reath in Chicago. “It’s difficult to plan for it and assess it, but the consequences are huge. It puts small-business owners in a trick box.”
From unions to family leave, here are seven to watch:
1. Paycheck Fairness Act: This measure would increase the burden on employers to demonstrate that wage gaps between men and women doing the same work are not based on gender but have a business justification, such as education, training or experience. The act, designed to strengthen the Equal Pay Act, also prohibits employers from ordering employees not to share salary information with co-workers. The Department of Labor is charged with educating small businesses about the law and assisting with compliance. The act would go into effect six months after its passage.
Covers: Employers covered by the Fair Labor Standards Act, which regulates businesses with annual gross sales exceeding $500,000, hospitals, some health care institutions, schools and public agencies.
Status: Passed by the House of Representatives on January 9. The Senate may consider the legislation later this year. According to government watchers, the recent enactment of another pay-equity measure, the Lilly Ledbetter Fair Pay Act, may make further consideration of the Paycheck Fairness Act less of a priority.
2. Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers Act: The proposed law would amend the National Labor Relations Act by changing the definition of a supervisor. The bill removes the phrases “assign” and “responsibility to direct” from the duties currently associated with a supervisory role and requires that workers spend the majority of a workday in managerial duties in order to be labeled a supervisor. The new definition reduces the number of employees who qualify for the title and makes more employees eligible for union membership. Under current law, employees categorized as supervisors are unable to join a union.
Covers: Businesses covered under the National Labor Relations Act, which regulates employers with more than $500,000 in gross revenues. Does not cover employers who fall under the Railway Labor Act, such as railroads and airlines, and federal, state and local governments.
Status: Introduced in the 110th Congress but has yet to be reintroduced in the 111th Congress.
3. FOREWARN Act: Would amend the Worker Adjustment and Retraining Notification Act by increasing the notification period for plant closings or mass layoffs to 90 days from 60. The act stiffens penalties for businesses to double back pay plus benefits for the period a business was delinquent in giving notice. The threshold for a mass layoff decreases to 25 employees from 50.
Covers: Employers with 50 or more employees, down from 100 under current law.
Status: Introduced in 2007. Expected to gain new ground with current administration.
4. Employment Non-Discrimination Act: Would provide basic protections against workplace discrimination on the basis of sexual orientation or gender identity. The bill is modeled on existing civil rights laws. Prohibits public and private employers, employment agencies and unions from using an individual’s sexual orientation or gender identity as the basis for employment decisions such as hiring, firing, promotion or compensation. Currently, 13 states including Illinois have policies that protect against both sexual orientation and gender identity discrimination.
Covers: Businesses with 15 or more employees. Religious organizations and military are exempt. Does not require domestic partner benefits be provided to same-sex partners of employees.
Status: A version that did not include protections based on gender identity passed the House in 2007.
5. Family Leave Insurance Act: Would amend the Family and Medical Leave Act to provide up to 12 weeks of paid leave benefits to workers who need to care for an ill family member or new child, treat their own illness or deal with the deployment of a member of the military. The act would extend Family and Medical Leave Act leave to employees who need to care for an ill domestic partner or the child of a domestic partner.
Covers: Business covered under the Family and Medical Leave Act, which regulates employers with at least 50 employees. Obama has indicated his support for expanding the Family and Medical Leave Act to cover companies with at least 25 employees.
Status: Introduced on March 25.
6. Healthy Families Act: Would provide up to seven days of paid sick leave for full-time employees working more than 30 hours per week. Part-time employees working more than 20 hours per week get a prorated share of paid leave. Time off can be used to meet an employee’s medical needs or to care for a family member.
Covers: Businesses that have at least 15 employees working 20 or more calendar weeks in the current or preceding year.
Status: Expected to be introduced in Congress.
7. Family and Medical Leave Enhancement Act: Would amend the Family and Medical Leave Act to allow employees up to four hours during any 30-day period, and up to 24 hours during any 12-month period, to attend a child or grandchild’s school or extracurricular activities. Time off also can be used to meet routine family medical care needs or the care needs of elderly family members.
Covers: Employers with between 25 employees and 50 employees.
Status: Referred to a House subcommittee in May.