The start to a new year means a time of change for many employers. This year, however, employers are facing added uncertainty in light of an informal discussion letter issued by the Equal Employment Opportunity Commission. In that letter, the EEOC inserted an additional dimension into the already-challenging pre-employment inquiry and applicant screening process by taking the position that an employer’s high school diploma requirement might violate the Americans With Disabilities Act. In particular, the EEOC explained that an across-the-board diploma requirement might unlawfully “screen[] out” an individual who is unable to graduate because of a learning disability that meets the ADA’s definition of “disability.” Thus, according to the EEOC, an employer may not adopt a high school diploma requirement “unless it can demonstrate that the diploma requirement is job related and consistent with business necessity.” Moreover, even if an employer can make that showing, “the employer may still have to determine whether a particular applicant whose learning disability prevents him from meeting it can perform the essential functions of the job, with or without a reasonable accommodation.”

Although the EEOC’s informal discussion letter does not carry the force of law, employers should be cognizant of the EEOC’s position on this issue when drafting and implementing pre-employment interview questions and other requirements in the applicant screening process. Employers should evaluate their existing inquiries and policies in light of this and other pre-employment guidelines propounded by the EEOC and consult an attorney with any questions or concerns.
 

True threats of violence or just talk?  The District of Columbia Circuit Court recently enforced an NLRB order in favor of two former employees who were fired for making alleged threatening remarks to a supervisor.  The supervisor had orally warned a group of employees who had exceeded the time for their break period.  Two employees then told the supervisor “it’s going to get ugly” and he “better bring [his] boxing gloves.”  The employer fired the employees for violating the employer’s zero-tolerance workplace violence policy.  The NLRB disagreed.  The Board held that the statements were “figures of speech,” not actual threats which would have not been protected speech under the NLRA.  Enforcing the NLRB decision, the District Court held that the Board’s determination was not unreasonable.  Kiewit Power Constructors Co. v. National Labor Relations Board, D.C. Cir., No. 10-1289, 8/3/11.

Louisiana legislators passed two new laws during the most recent Legislative Session placing additional requirements on employers to check the citizenship status of employees.

Act 376 provides for the verification of employees engaged only in public contract work by enacting La. R.S. 38:2212.10.  The new law provides that a private employer shall not bid on or contract with a public entity unless the employer attests via sworn affidavit to the use of an immigration verification system to verify that all employees in the state of Louisiana are legal citizens of the U.S. or are legal aliens.  All subcontractors are required to do the same.  Violations of the new law may result in cancellation of the public contract and ineligibility for any public contract for a period of three years or less.  If the employer complies with the verification provisions and relies on the information obtained in accordance with the verification system, the employer is protected from state law civil and criminal liabilities for: (i) hiring someone that is later found to be an unauthorized alien and (ii) refusing to hire an individual whose legal status within the verification system was that of an unauthorized alien.  The provisions of the new law apply only to contracts entered into or bids offered on or after January 1, 2012.  If the status verification system expires and is not extended by the federal government, the provisions of this new law will no longer be applicable.  Link to Act 376

Act 402 has a much broader application than Act 376, requiring verification of citizenship and authorization for employment. La. R.S. 23:995 already prohibits a person from hiring an illegal alien.  Act 402 adds new provisions to this statute that become effective August 15, 2011.  The new law provides that a person shall not be subject to certain sanctions if: (i) the E-Verify system has been used to verify the citizenship or work authorization status of every employee or (ii) the employee has provided to the employer a picture identification and at least one of the following documents: a U.S. birth certificate or certified birth card, Naturalization certificate, certificate of citizenship, alien registration card, or U.S. immigration form I-94 with employment authorized stamp.  The employer must retain copies of all documents provided by the employee.  An employer who has used the E-Verify system is presumed to have been in good faith and is not subject to any penalty for relying on the accuracy of the information contained therein.  The penalty provisions within the statute have been increased to $500 for a first violation, $1,000 for a second violation, and $2,500 for a third violation.  The penalty provisions are applicable to each alien employed in violation of the law.  There is an exemption for health care facilities/entities licensed by DHH under the statutory provisions relating to second and third violations.  Link to Act 402

Since 2003, Louisiana, through the Department of Health and Hospitals (“DHH”) and the Medicaid Program, administers home and community-based health services (“HCBS”) available to disabled citizens. The HCBS includes several programs, one of which is the Long Term Personal Care Services (“LT-PCS”) program. The LT-PCS program provides disabled citizens with a personal care worker to assist with performing personal care or household chores that the disabled citizen would otherwise be unable to perform, in order to avoid being institutionalized. Individuals who do not qualify for LT-PCS or who seek additional or alternative services may enter one of Louisiana’s waiver programs: Elderly and Disabled Adults, Adult Day Health Care, Program of All-inclusive Care for the Elderly, or Money Follows the Person for individuals transitioning from nursing facilities. However, these programs have limited slots, geographical or age limits, and long waiting lists. An individual may be moved to the top of the priority list and immediately obtain a waiver, if the individual has had a hospital stay in excess of 30 days or has been treated in a nursing facility for 120 consecutive days.

On September 22, 2010, Helen Pitts and other plaintiffs filed suit against DHH and Secretary Bruce Greenstein (“Defendants”) for declaratory and injunctive relief to prohibit the implementation of the reduction in weekly service hours, claiming the Act violated Title II of the Americans with Disabilities Act (“ADA”) and Section 504 of the Rehabilitation Act of 1973, by unlawfully discriminating against them by depriving them of at-home assistance necessary to remain “integrated” into the community. Pitts et al v. Greenstein, 2011 WL 2193398 (M.D. La. 2011). Plaintiffs contended the average cost of services for an individual in the LT-PCS program is less than the cost of maintaining the individual in a nursing home.

DHH and Greenstein filed a motion for summary judgment, seeking to have the lawsuit dismissed. They contended the reduction did not discriminate against the plaintiffs under the ADA or Section 504 of the Rehabilitation Act of 1973, because there was a comprehensive and effective plan in place to provide disabled individuals with HCBS. The Defendants pointed to the combination of HCBS and waiver programs that would ensure disabled individuals were not forced into nursing facilities. They also contended that, even if the reduction did discriminate against the plaintiffs, the claims failed because plaintiffs did not meet their burden of showing that returning to the 42-hour weekly maximum for services hours was a reasonable modification to the plan for reduction of service hours to 32 hours per week. In response, the Plaintiffs asserted the State’s plan increased their risk of institutionalization, because the waiver programs were either not available in their geographic area or had a long waiting period to qualify. The plaintiffs argued that, in order to move to the top of the waiting list for the waiver programs, they had to be subjected to institutionalization—the very situation the ADA was designed to prevent.

The court denied the Defendants’ motion for summary judgment, finding genuine issues of material fact as to whether maintaining the prior 42 hours per week maximum for services was a reasonable modification or a fundamental alteration for purposes of the Plaintiffs’ ADA claims. The court stated that Louisiana’s current plan plainly violated the ADA by creating a greater risk for institutionalization for those disabled individuals who require more than 32 hours per week of assistance.

The plaintiffs also sought certification of a class action for all Louisiana residents with disabilities who are recipients or prospective recipients of Medicaid-funded services through the LT-PCS program, who want to and are able to continue to reside in the community rather than in an institution with appropriate Medicaid-funded LT-PCS services, and who are at risk of institutionalization because of the planned reduction in the maximum number of service hours available under the LT-PCS program. The Defendants opposed the certification, arguing that the defined class was overly broad, that plaintiffs’ claims were not typical of the remaining class members, and that the plaintiffs had conflicting interests with the remaining class members such that the plaintiffs would not fairly and adequately represent the interests of the remaining class members. The Defendants argued that the class was overly broad because it included: 1) individuals who did not require more than 32 hours per week of services; 2) individuals who, if they did require more than 32 hours per week, had access to waiver programs or other means to secure supplemental care; or 3) required more than 42 hours of weekly services.

The court agreed the class should be defined to exclude those individuals who did not require more than 32 hours per week of services and those who could receive the necessary supplemental care through alternative sources. The court refused to exclude those individuals who required more than 42 hours per week of services, since those individuals would be at risk for institutionalization if their service hours were reduced even more. Thus, the court defined the class as follows:

“Louisiana residents with disabilities who have been receiving Medicaid-funded services through the LT-PCS program; who desire to reside in the community instead of a nursing facility; who require more than 32 hours of Medicaid-funded personal care services per week in order to avoid entering a nursing facility, and who do not have available (including through family supports, shared living arrangements, or enrollment in the ADHC [Adult Day Health Care] waiver) other means of receiving personal care services.”

The court also found that the class was sufficiently numerous, because 28% of the 12,000 individuals currently receiving LT-PCS services receive in excess of 32 hours per week of services. In addition, the court noted there were countless future members of the class who may not yet qualify for LT-PCS but who may wish to preserve their rights on the issue of the reduction of the service hours. Finally, many of the class members faced severe financial hardship due to their conditions and lacked the financial resources to bring suit individually to protect their rights.

The court found all class members were at risk of being forced to enter a nursing home as a result of the reduction in weekly service hours. The court likewise found there were common issues of law and fact as to each of the class members, including whether the Defendants violated the ADA or Section 504 of the Rehabilitation Act of 1973 by lowering the maximum weekly service hours from 42 to 32 hours or by requiring individuals to submit to an extended stay in a nursing facility to immediately qualify for critical, supplemental services through the waiver programs. Another common issue was whether the State’s waiver programs were sufficient to fill the void created by the reduction in service hours.

The court also found the plaintiffs’ claims and the Defendants’ defenses to those claims were sufficiently typical to the claims and defenses applicable to the remaining class members. Both the plaintiffs and the remaining class members claim that the reduction in service hours increases their risk of institutionalization; the waiting lists for the waiver programs do not move fast enough to provide the supplemental care required to avoid institutionalization; and they must submit to the very institutionalization they want to avoid to be moved to the top of the waiver waiting lists. Finally, the court found the plaintiffs would fairly and adequately represent the claims of the remaining class members. The court granted the plaintiffs’ motion to certify the class.

For the many LT-PCS providers and recipients, this class action case will be important to monitor to see whether the court rules Louisiana cannot limit the LT-PCS services hours to a maximum of 32 per week. If so, the state will incur increased costs for the program. It remains to be seen how Louisiana would cover these costs in the current budget-cutting environment and what other changes to this and the other home and community based programs may be made.
 

In a press release from Thursday, March 24, 2011, the EEOC announced the  approval of the final regulations for the ADA Amendments Act.  The final regulations were published on Friday, March 25, 2011, in the Federal Register.  The release of the long-awaited regulations did not raise the same level of fanfare as the iPad 2.  Nor did it provoke as much as excitement as that exhibited by Steve Martin in the 1979 comedy “The Jerk” where he wildly exclaimed: “The new phone book is here!  The new phone book is here!”  But the ADAAA regulations have finally arrived, and the regulations are important and provide employers and attorneys with guidance on the ADAAA.  The ADAAA was enacted on September 25, 2008, and became effective January 1, 2009.  The Act directed the EEOC to amend the prior regulations to reflect the changes made by the ADAAA.  After much analysis and comment, the final regulations have been approved.  The new regulations can be found here.

On February 7, 2011, the NLRB and a private employer reached a settlement regarding the employer’s termination of an employee allegedly based, in part, on Facebook posts made by the employee. However, because the case had not made it through the courts, employers and employees will have to continue to wait for a definitive decision regarding the legality of disciplining an employee for his or her postings about a supervisor on a personal social media platform.

On February 7, 2011, the NLRB reached a settlement with the company. According to the NLRB’s February 8, 2011 press release, under the terms of the settlement, the company agreed, among other conditions, “to revise its overly-broad rules to ensure they do not improperly restrict employees from discussing their wages, hours and working conditions with co-workers and others while not at work, and that they would not discipline or discharge employees for engaging in such discussions.” For the complete NLRB press release, click here.  

Because the matter did not proceed to a final decision, the settlement itself has no precedential value, and the issues raised by this case – particularly concerning an employee’s right, on his or her own time and using his or her own personal computer, to disparage a supervisor through social media – remain unresolved. However, the settlement highlights the need for employers to reexamine and, if appropriate, revise employee handbooks, especially internet and/or social media policies, to ensure that such policies comply with the National Labor Relations Act and other laws.
 

The Supreme Court recently struck a blow to employers and made another expansion to the scope of Title VII’s retaliation provisions. By its January 24, 2011 decision in Thompson v. North American Stainless, LP, --U.S. --, 2011 WL 197638 (2011), the court overturned a Sixth Circuit decision which had affirmed the dismissal of the retaliation claims brought by a terminated fiancé of another employee who had brought a sexual harassment charge. By its ruling, the Supreme Court held that the fiancé could bring his own suit under Title VII for the alleged retaliatory termination, even though he did not himself engage in any protected activity prior to his termination.

The Court explained: “[Fiancé] falls within the zone of interests protected by Title VII. He was an employee of NAS, and Title VII's purpose is to protect employees from their employers' unlawful actions. Moreover, accepting the facts as alleged, [Fiancé] is not an accidental victim of the retaliation. Hurting him was the unlawful act by which NAS punished [Complaining Employee].” Id.

The Court also refused to restrict or specifically define any particular set of relationships that would fall into the “zone of interest” of Title VII’s retaliation provision, stating:

“We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize. As we explained in Burlington, 548 U.S., at 69, 126 S.Ct. 2405, ‘the significance of any given act of retaliation will often depend upon the particular circumstances.’ Given the broad statutory text and the variety of workplace contexts in which retaliation may occur, Title VII's antiretaliation provision is simply not reducible to a comprehensive set of clear rules. We emphasize, however, that ‘the provision's standard for judging harm must be objective,’ so as to ‘avoi [d] the uncertainties and unfair discrepancies that can plague a judicial effort to determine a plaintiff's unusual subjective feelings.’ Id., at 68-69, 126 S.Ct. 2405.”

Id., 4 (Emphasis added).

Because the ADA adopts the same “person … aggrieved “ provisions of 42 USC 200e-5 and the ADEA provides at 29 U.S.C. 626 that “any person aggrieved may bring a civil action…,” the Thompson decision likely will not be limited to retaliation under Title VII.
 

Employers are struggling with how to respond to employee use of social media, particularly whether and/or how to respond to – or prevent – employees from posting comments about their employers on their personal social networking platforms, such as Facebook, My Space, and Twitter.  Until recently, there has been little guidance for employers in navigating this new territory.  However, on Tuesday, November 2, 2010, the National Labor Relations Board issued a press release, through which the Board announced its position on the issue.

The right to engage in concerted activity applies with equal force to union and non-union employees. A hearing on the case is scheduled for January 25, 2011.
 

Electronic Discovery, or “E-Discovery”, is not considered the “novel issue” it once was. However, E-Discovery still presents problems that litigants and courts struggle with. Below is a summary of recent Louisiana Federal Court opinions dealing with the issues surrounding E-Discovery.

In Frees, Inc. v. McMillian, 2007 WL 184889 (W.D. La. Jan. 22, 2007), the Western District of Louisiana granted the plaintiff’s motion to compel. In an unfair competition and trade secret theft action, the plaintiff claimed that the defendant, a former employee, had stolen various data files. Plaintiff had unsuccessfully requested production of defendant’s laptop and desktop. The Court granted the motion to compel the defendant to produce these two items because they were the most likely places that the data files would be located. The Court did institute protective measures so as to prevent the disclosure of any irrelevant or personal information.
 

In Green v. Fluor Corp., 2009 WL 1668376 (M.D. La. June 11, 2009), a case in the Middle District of Louisiana, the defendant sought access to the plaintiff’s phone and e-mail system to obtain the original version of a photograph the plaintiff had given to the defendant as part of discovery. The defendant claimed the produced photograph taken from a phone was of low quality and wanted access to the plaintiff’s phone and e-mail to obtain a clearer picture. The Court denied the motion because the defendant failed to ask for the particular form of the discovery in regards to the picture and therefore had to settle with what the plaintiff had produced.

In Marketfare Annunciation, LLC v. United Fire & Casualty Ins. Co., 2007 WL 3273440 (E.D. La. Nov. 5, 2007), the Eastern District of Louisiana dealt with a spoliation issue involving electronic evidence in a claim that arose due to Hurricane Katrina. The defendant failed to produce certain e-mails even after the plaintiff put the defendants on notice to preserve them. However, the plaintiff waited until the eve of the close of discovery to file sanctions and therefore the court denied the request.

In Thomas v. IEM, 2008 WL 695230 (M.D. La. Mar. 12, 2008), the Middle District of Louisiana dealt with a civil rights violation. The plaintiff served a Rule 45 subpoena on the defendant in order to obtain access to nine named individuals’ e-mail boxes. The Court held this was an attempt to circumvent discovery deadlines under Rules 26 and 34 and therefore did not grant the request.

In Canon USA, Inc. v. SAM, Inc., 2008 WL 2522087 (E.D. La. June 20, 2008), the Eastern District of Louisiana granted a motion to compel electronically stored data that the defendant had at his home in Florida. After Hurricane Katrina, defendant moved his computer to Florida but when discovery requests were made he did not search the computer to provide complete answers to interrogatories. The court held that this “lackadaisical” treatment of discovery was unacceptable and held that any undeleted information on the computer was discoverable. The Court ordered the defendant to obtain the services of a “forensic computer specialist” and fully respond to the discovery request.

In re Riverside Healthcare, Inc., 2008 WL 4183609 (M.D. La. Sept. 11, 2008), a case in the Middle District of Louisiana, a bankruptcy liquidating supervisor accused a creditor of destroying evidence and sought the adverse presumption that follows spoliation. The creditor had deleted e-mails that the liquidating supervisor considered necessary evidence. However, the court held that spoliation requires bad faith and here there was no bad faith due to the fact that the creditor destroyed e-mails automatically every sixty to ninety days.

In Johnson v. Big Lots Stores, Inc., 2008 WL 2191357 (E.D. La. May 7, 2008), the Eastern District of Louisiana ruled that a plaintiff could not take another deposition of the defendant’s representatives regarding how the defendants preserved and collected electronic data. The Court stated that since the plaintiffs failed to list “e-Discovery” as an issue at the original deposition and since they waited until two days before the close of discovery, the motion to compel the second deposition was denied. The Court also stated that “e-discovery” matters are no longer the novel issues that they once were with the advent of the Internet and wide expansion of computerized data collection and the plaintiffs had no legitimate excuse as to why they failed to make issue of “e-discovery” at the original deposition.

In Hoover v. Fla. Hydro, Inc., 2008 WL 4467661 (E.D. La. Oct. 1, 2008), the Eastern District of Louisiana allowed discovery of two non-parties’ computers. In this breach of contract claim, the defendant sought the electronic data from the plaintiff’s mother and a friend who helped him in his business. The Court held that this would not create an undue burden on the mother because the non-party was involved in the plaintiff’s business and would have relevant information stored on her computer. The subpoena was quashed as to the friend because he had adequately answered the discovery request.

In May v. Fedex Freight Southeast, Inc., et al., 2009 WL 1605211 (M.D. La. June 8, 2009), a Middle District of Louisiana case, the plaintiff brought suit for sexual harassment while she was employed by the defendant. Plaintiff sought “any and all e-mails referencing, as well as those sent to and from, plaintiff and [the accused sexual harasser].” The defendant claimed that this was not possible because the e-mail was inaccessibly archived and unsorted. The Court held that the plaintiff and defendant had to meet with the defendant’s IT department to discuss the “burden and expense of producing the e-mails requested by plaintiff.” If then there was still no agreement, the plaintiff was urged to reassert her motion to compel.
 

In Bollinger Shipyards, Inc. v. Director, Office of Worker’s Compensation Programs, U.S. Dept. of Labor, (5th Cir. 2010) the United States Fifth Circuit upheld the award of workers compensation benefits to an undocumented immigrant worker who was injured on the job as a pipefitter.

The Bollinger plaintiff, Jorge Rodriguez, fell and allegedly injured himself while welding for his employer, Bollinger Shipyards, Inc.  At the time of his alleged injury, Rodriguez had been working for Bollinger for approximately eight months, having initially obtained employment by falsely holding himself out as a United States citizen.  Rodriguez presented Bollinger with a false Social Security Card.  Bollinger initially paid Rodriguez temporary disability benefits and reimbursed him for a portion of his medical bills.
 

The primary question on appeal was whether an undocumented immigrant could be eligible for benefits under the LHWCA.  Bollinger argued that Rodriguez’s injury caused him no loss of wage earning capacity because he had no legal wage earning capacity at the time he was injured.  As such, Bollinger argued that Rodriguez was per se ineligible under the Act.  Bollinger further argued that the Benefit Review Board’s ruling undermined the Congressional policies embedded in the Immigration Reform and Control Act of 1986.  Bollinger relied on a line of Supreme Court cases, including Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), which made the distinction as to whether wages could be paid legally in declining to award some types of relief under the NLRA in order to avoid a conflict with the immigration laws, which prohibit the employment of aliens who enter or remain in the country illegally and which also criminalizes the use of false documentation to obtain work.

The Director, OWCP and several amici curiae filed briefs in support of Rodriguez’s eligibility for benefits under the LHWCA, arguing that failing to require workers’ compensation for immigrant workers encourages employers to hire undocumented workers.  The Fifth Circuit reviewed the statutory language of the LHWCA and concluded that the statute provides coverage to undocumented immigrants.  The Court found the precise language of §909(g) persuasive.  Section 909 (g) states that “[c]ompensation under the [the LHWCA] to aliens not residents (or about to become nonresidents) of the United States or Canada shall be the same in amount as provided for residents.”  The Fifth Circuit noted that other courts, have concluded that the unmodified term “alien” encompasses both documented and undocumented immigrants.  The court noted that compensation under the LHWCA is a non-discretionary statutory remedy.  Unlike the NLRA, the LHWCA is a substitute for tort law, abrogating fault of either the employer or the employee.  Further, the court held that awarding death or disability benefits post hoc to an undocumented immigrant under the LHWCA does not “unduly trench upon” the IRCA, because Congress chose to include a provision in the LHWCA expressly authorizing the award of benefits.

Finally, the court held that Fifth Circuit precedent has been that undocumented immigrants are eligible under the LHWCA, citing Hernandez v. M/V Rajaan, 841 F.2d 582, amended after rehearing, 848 F.2d 498 (5th Cir. 1988), the court held that Rodriguez was entitled to benefits because Bollinger failed to provide any evidence that Rodriguez was “about to be deported or would surely be deported.”  The court also found persuasive the D.C. Circuit’s opinion in Rivera v. United Masonry, Inc., 948 F.2d 774, 775 (D.C. Cir. 1991), in which the court declined to take into consideration an immigrants undocumented status when determining his eligibility for benefits.

Bollinger filed a petition for review which was denied in all respects. (5th Cir. April 22, 2010).  Although the Fifth Circuit seems to have made it clear that undocumented immigrant will remain eligible for benefits under the LHWCA, the court left open the possibility that an alien who was about to be deported or was sure to be deported might not be eligible for future lost wage benefits calculated as they would be earned in the U.S.
 

Employers covered by the Fair Labor Standards Act should take note of references on the Web site of the U.S. Department of Labor (“DOL”) about the “We Can Help” nationwide campaign.

A “News Release,” dated April 1, 2010, on the DOL Web site refers to the “`We Can Help’ nationwide campaign” and states that “[t]he effort, which is being spearheaded by the department’s Wage and Hour Division, will help connect America’s most vulnerable and low-wage workers with the broad array of services offered by the Department of Labor.”  It goes on to state in part that “[i]t also will address such topics as rights in the workplace and how to file a complaint with the Wage and Hour Division to recover wages owed.”

The “News Release” also quotes the Secretary of Labor as stating that “I have added more than 250 new field investigators nationwide – an increase of a third – to help in this effort.”
 

As discussed in the recent New York Times article, federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors.

President Obama's 2010 budget assumes that the federal crackdown will yield at least $7 billion over 10 years.  More than two dozen states also have stepped up enforcement, often by enacting stricter penalties for misclassifying workers.  This effort is intended to reign in what regulators believe is a trend among companies to cut costs by classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees. Moreover, the experts say, workers have become more reluctant to challenge such practices, given the tough job market.

To determine if you or your company is complying with the rules and regulations as applicable to independent contractors, please call your attorney.  

Effective July 24, 2009, the federal minimum wage increased from $6.55 per hour to $7.25 per hour for all non-exempt employees.  The 2009 increase in the federal minimum wage was the third and final increase to the federal minimum wage pursuant to Fair Minimum Wage Act of 2007.  Under the 2007 Act, the minimum wage established by the Fair Labor Standards Act increased in three steps from $5.85 per hour effective July 24, 2007, to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24.

In addition to the establishment of the minimum wage, the Fair Labor Standards Act establishes overtime pay requirements, record keeping and posting requirements, and youth employment standards.  Under the Fair Labor Standards Act, non-exempt employees must be paid at least the minimum wage per hour, and one and one half times the employee’s “regular rate of pay” (not necessarily their hourly rate) for all hours worked over forty hours per work week. 

Section (13)(a)(1) of the Fair Labor Standards Act provides an exemption to both the minimum wage and overtime obligations. Under Section (13)(a)1, employees employed as bona fide executive administrative, professional employees, and outside sales people are considered “exempt” if: (1) certain tests regarding their job duties are met; and (2) the employee is paid on a “salary basis.”  The employee’s specific job duties, not title, dictate whether the employee is exempt or non-exempt. Although state law provides for breaks for minors, the Fair Labor Standards Act does not require breaks or meal periods.  Nor does the Fair Labor Standards Act define “full-time” employment.  This designation “full-time” (versus part-time) employment is determined by the employer.  Likewise, the Fair Labor Standards Act does not require severance pay, sick leave, vacation, or holidays.

The final revised FMLA regulations issued by the DOL on November 17, 2008 became effective January 16, 2009. The regulations address the FMLA military family leave entitlements and also include other, significant changes to prior regulations. Some of the changes involving employer notices are described in 29 C.F.R. §825.300 and include:

Eligibility Notice -
29 C.F.R. § 825.300(b). An employer must notify an employee who requests FMLA leave within five business days whether the employee is eligible and, if not eligible, the notice to the employee must provide at least one reason for the ineligibility. Notice may be oral or in writing. For subsequent requests by the same employee during the applicable 12-month period, the employer need not provide another eligibility notice unless the employee’s eligibility status has changed. A prototype written notice form is provided at Appendix D of the regulations.

Rights and Responsibilities Notice -
29 C.F.R. § 825.300(b). Also, “each time” an eligibility notice is provided to an employee, a Rights and Responsibilities Notice must be provided. This notice is incorporated into the prototype Notice of Eligibility and Rights and Responsibilities at Appendix D of the regulations. If certification forms will be required by an employer to substantiate the need for leave, the notice may attach the required forms.

Designation Notice -
29 C.F.R. § 825.300(d). When an employer has enough information to determine whether the leave is being taken for an FMLA-qualifying, the employer must provide written notice to the employee within five business days as to whether the leave will be designated and counted as FMLA leave. The notice must state whether a fitness for duty certificate will be required at the end of the leave. Though the regulations provide that generally, only one designation notice must be given to an employee for each qualifying reason within a twelve-month period, the regulations also provide that if the information changes (such as when leave is exhausted), the employer must issue a written notice of the change within five business days of the employee’s request for leave subsequent to the change. The employer must notify the employee of the amount of leave counted against the employee’s leave entitlement. If the amount of leave is unknown at that time (because, for example, the leave will be unforeseeable intermittent leave), then an employer must provide notice of the amount of leave counted against the employee upon the employee’s request, but no more than one in a 30-day period and only if leave was taken in that period. A prototype designation notice form is provided by the DOL at Appendix E.

Failure to comply with the posting or notice requirements may subject an employer to civil money penalties or other civil liability. A complete copy of the regulations and prototype forms are available at the DOL website.
 

As we continue our shift to a more knowledge-based economy, frequently the greatest assets of a company reside in the creativity of its employees. This is especially true for service companies in which the services can be repeated for multiple customers (example: software). Whether or not a company owns something that has been created by one of its employees will depend to a great extent on the category of intellectual property into which the creation is classified. Generally, the creations or discoveries of employees will fall into the intellectual property categories of copyright, patent, or trade secret.

The legal standard used in determining whether a company owns a patentable invention is narrower than the “scope of employment” standard used in copyright law. For patentable inventions, the courts look to whether the employee had a “duty to invent.” We return to the above example of Mr. Jones, the dispatcher. Suppose the creation by the dispatcher was capable of patent protection. Because Mr. Jones was a dispatcher, who did not have a specific duty to invent, it is likely the company would not own any patent that might be issued to cover the invention.

For trade secrets, the law is less clear than the law for copyright and patent. Generally, trade secret law states that a trade secret will exist if the underlying information has value by not being generally known and is the subject of reasonable measures to keep it secret. Trade secrets are normally the property of the company, and not the individual employees. However, as a practical matter trade secrets are harder to control than patents or copyrights. If an employee maintains a list of customer contacts on her personal cell phone, and the employer does not have a specific policy stating that customer contacts are the property of the employer; it will be difficult for the employer to assert that the contact information is a company trade secret when that employee leaves the company.

Companies should use their information technology management practices to bolster the company’s trade secret practices. For example, if the sales person above had been provided a company Blackberry, and if the system ensured that all contact information was stored on company servers; the company would have a stronger basis for arguing that the customer contact information is a trade secret. The company would be in an even stronger position if it had a written policy regarding the company’s trade secret practices. Additionally, trade secret obligations should be included in employment agreements as well.

Employment agreements can also be used to clarify the company’s ownership of copyrights and patents. The company can make clear that the “scope of employment” for copyrights is considered very broad. Also, the company could impose a duty to invent on all employees. Additionally, the employee agreement can clearly state, under a simple contractual basis, that all inventions or works of authorship created by employees are owned by the company.

A company can properly protect and claim ownership over the creations of its employees. Doing so requires a knowledge of the different areas of the law that apply and appropriate company practices. Those practices should take advantage of the applicable law and should fill in the gaps where the law does not adequately address the situation.
 

After April 3, 2009, the U.S. Citizenship & Immigration Service ("USCIS") will require employers to complete a new version of the familiar I-9 form for all new employees. The USCIS delayed implementation of the new rule requiring the new I-9 until April 3.

In July of 2008, Gov. Jindal signed Senate Bill no. 51 into law. Senate Bill no. 51 has been dubbed the “take-your-gun-to-work law.” The new statute took effect on August 15, 2008. The United States 10th Circuit Court of Appeals recently upheld a similar Oklahoma statute.

Louisiana is not the first state in the nation to enact such legislation. Other states with similar laws include Alaska, Kentucky, Mississippi, Georgia, Florida, and Oklahoma. Legal challenges to the statutes followed.
 

Louisiana’s Senate Bill no. 51 enacts La.R.S. 32:292.1 and makes it lawful for a person who “lawfully possess” a firearm to transport or store the firearm in a locked, privately-owned vehicle in any parking lot, parking garage, or other designated parking area. Property owners, tenants, employers, and businesses may not prohibit any person from transporting or storing a firearm in a locked, privately-owned vehicle in any parking lot, parking garage, or other designated paring area. But, employers and business entities may adopt polices specifying that the firearms must be hidden from plain view or within a locked case or container within the vehicle.

The statute does not apply to vehicles “on property controlled by” employers or businesses if access to the property is restricted through the use of a fence, gate, security station, or other means of limiting access to the general public; and either one of the following applies: (a) the employer or business entity provides for the temporary storage of unloaded firearms, or (b) the employer or business entity provides an alternative parking area (“reasonably close”) to the main parking area where employees and others may transport or store firearms in locked, privately-owned motor vehicles.

Property owners, tenants, employers, or businesses may not be held liable for damages “resulting from or arising out of an occurrence involving a firearm transported or stored” pursuant to the new law. But property owners, tenants, employers, or businesses may be held liable for damages for prohibiting the otherwise authorized transportation or storage of firearms.
 

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the “ARRA”), the comprehensive economic stimulus package. Among its other provisions, the ARRA includes an extension of the right to elect COBRA coverage, a reduction in COBRA premiums for eligible participants, and new notice obligations for employers.

Reduction of COBRA Premium: In addition to the opportunity to elect COBRA coverage, the ARRA offers a reduction in COBRA premiums for assistance eligible individuals. Assistance eligible individuals can receive a 65% premium reduction subsidy for the cost of COBRA coverage after February 17, 2009 (the day the ARRA was signed). But the premium reduction ends upon the sooner of: the eligibility for other group coverage or Medicare; after 9 months of receiving the reduction; or when the maximum period of COBRA coverage ends, whichever occurs first. Individuals paying reduced COBRA premiums must also inform their plans if they become eligible for coverage under another group health plan or Medicare.

Assistance eligible individuals are those former employees (and members of their families) who were eligible for COBRA at anytime between September 1, 2008 and December 31, 2009, lost their job due to an involuntary termination, and who elect COBRA coverage. Assistance eligible individuals are required to pay only 35% percent of the COBRA premium. Under the ARRA, once the beneficiary pays his or her 35% of the COBRA premium, the COBRA premium is considered paid. The employer, insurer, or health plan then picks up the remaining 65% of the premium, but is allowed a tax credit against certain employment taxes. The credit can only be taken after the 35% premium has been paid. According to the IRS, if the credit claimed is greater than the tax due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess. The premium reduction only applies to periods of coverage beginning on or after February 17, 2009.

Additional Notice Obligations: Finally, the ARRA requires employers or plan administrators to provide eligible employees and covered family members with notice regarding the special COBRA-election period on or before April 17, 2009. Notice must also be provided regarding the premium reduction for those who had a COBRA-qualifying event between September 1, 2008 and December 31, 2009. This notice must be sent regardless of whether COBRA coverage was elected.

The Employee Benefits Security Administration is working on guidance regarding the ARRA, and the IRS may be able to provide additional guidance. Also, model notices are expected to be issued.
 

On January 29, 2009, President Barack Obama signed into law the Lilly Ledbetter Fair Pay Act. The Act amends four federal laws by redefining the events that trigger the charge-filing and limitations periods for cases alleging discrimination in compensation. The most important consequence of the Act is that the time limit for initiating a pay discrimination claim will regenerate with each allegedly discriminatory paycheck the employee receives.

Congress found that the Ledbetter decision “significantly impair[ed] statutory protections against discrimination in compensation [established by Congress] . . . and undermine[d] those statutory protections by unduly restricting the time period in which victims of discrimination can challenge and recover for discriminatory compensation decisions or other practices. . . .” Therefore, through the Act, Congress set out to expand the period for challenging such decisions.

The Act declares that the period for filing a charge of discriminatory compensation under Title VII of the Civil Rights Act of 1964 (“Title VII”) (the broad federal anti-discrimination statute), the Americans with Disabilities Act of 1990 (“ADA”), the Age Discrimination in Employment Act of 1967 (“ADEA”), or the Rehabilitation Act of 1973 (“Rehabilitation Act”) begins when any of the following events occur: (1) a “discriminatory compensation decision or other practice is adopted”; (2) “an individual becomes subject to a discriminatory compensation decision or other practice”; or (3) “an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid.” Simply put, this means that the period for filing a claim of discrimination in compensation is resurrected each time an employer issues a discriminatory paycheck.

Regarding compensation, the Act clarified that an employee who succeeds in his claim for discrimination in compensation under Title VII, the ADEA, or the Rehabilitation Act may recover back pay for up to two years preceding the filing of a charge if the discrimination in compensation that took place outside of the filing period was “similar or related to” the discrimination that occurred during the charge-filing period. Also, it is important to note that by its terms, the Ledbetter Act takes effect as if it was enacted on May 28, 2007, and it applies to all claims of discrimination in compensation pending on or after that date.

The Ledbetter Act will have a huge impact on employers and is predicted to spawn a dramatic increase in claims of discrimination in compensation. Prior to the Act, the Ledbetter decision insulated an employer from being forced to defend lawsuits challenging pay decisions made years beforehand. Under the new legislation, the limitations period for bringing a claim of discrimination in compensation will start afresh each time the employer issues an allegedly discriminatory paycheck. Essentially, as long as the employee remains employed, the time limit for challenging discriminatory pay will never expire.

As a result of the Act, an employer must be prepared to defend pay decisions made years ago. Employers can expect to face claims of discrimination in compensation based on gender, race, disability, age, and other protected classes, as the Act applies the nearly limitless filing period to claims of pay discrimination under Title VII, the ADA, ADEA, and Rehabilitation Act. Commentators have urged employers to examine their record retention policies in order to ensure that documentation needed to defend claims regarding discrimination in compensation is not destroyed over time. Also, employers should review current pay practices, as an employee has the ability to challenge an allegedly discriminatory pay decision, irrespective of when the decision was made.
 

On December 23, 2008, President Bush signed the Worker, Retiree, and Employer Recovery Act of 2008 (the Act) into law.  Section 201 of the Act waives any required minimum distributions (RMDs) for 2009 from retirement plans that hold each participant's benefit in an individual account, such as § 401(k) plans and § 403(b) plans, and certain § 457(b) plans.  The Act also waives any RMD for 2009 from an Individual Retirement Arrangement (IRA).

The Act does not waive any 2008 RMDs, even for individuals who were eligible and chose to delay taking their 2008 RMD until April 1, 2009 (e.g., retired employees and IRA owners who turned 70 1/2 in 2008).  These individuals must still take their full 2008 RMD by April 1, 2009.  The 2009 RMD waiver under the Act does apply to individuals who may be eligible to postpone taking their 2009 RMD until April 1, 2010 (generally, retired employees and IRA owners who attain age 70 1/2 in 2009).  However, the Act does not waive any RMDs for 2010.

If a beneficiary is receiving distributions over a 5-year period, he or she can now waive the distribution for 2009, effectively taking distributions over a 6-year rather than a 5-year period.  See IRS Notice 2009-9 which can be found here.