The Employment Practices Alert covers significant employment law trends & developments in a summary format. Links to additional information on the Internet are included in the topic headings along with the contact information of Hinshaw & Culbertson employment law attorneys who will answer any questions you may have. If you wish to be added to or removed from our list of subscribers who receive complimentary copies of the Employment Practices Alert via email, or if you have any comments or suggestions, please contact the editors, at (312-704-3220) or at (312-704-3578).
In This Issue:
Hinshaw Workplace Solutions Presents Health Care Industry Breakfast Briefing
Employers in the health care industry are under extraordinary pressures from regulators, patients, payors and, increasingly, from unions and their own employees. Health care institutions must balance employee demands with financial cost constraints while they remain focused on the delivery of quality patient care. Hinshaw's labor and employment law attorneys are regularly called upon to provide practical and effective solutions to the workplace challenges faced by many of the key health care providers in the country. On Wednesday, January 14, 2004, a panel of Hinshaw's labor and employment law attorneys will present a two-hour breakfast briefing at the Westin River North Hotel in Chicago, Illinois, which will focus on management strategies for dealing with the human resources issues of the health care industry. Briefing topics will include: (1) Union organizing & collective bargaining; (2) Wage and hour issues; and (3) Updates on employment law issues in the health care industry. The cost is $30.00 per attendee if paid prior to January 7, 2003 or $35.00 at the event. For more information or to register, call 312-704-3064.
Contact for more information: Paul J. Cherner
Employee Ordered To Pay Employer's Litigation Costs
In Thomas v. George Washington University, et al., Thomas alleged that the University failed to renew his appointment to its Diagnostic Radiology Residency Program because of his African-American race and a physical impairment in his left leg. A unanimous jury returned verdicts against Thomas on all of his claims except one, his charge that the University failed to accommodate his alleged disability. However, the University ultimately prevailed on this claim as well when the trial judge ruled that Thomas had failed to establish that he was disabled within the meaning of the ADA. Subsequently, the trial court ordered that Thomas pay the billable costs of the University incurred in defending against the suit pursuant to Federal Rule of Civil Procedure 54, which provides that costs "other than attorney's fees shall be awarded as of course to the prevailing party unless the court directs otherwise." Thomas opposed being taxed with the costs on two grounds: (1) the University was not the prevailing party in the lawsuit, and (2) requiring him to pay the University's costs would have a chilling effect on potential victims of discrimination. The court rejected these contentions, saying Thomas was "simply wrong" that the University was not the prevailing party. Moreover, in terms of the chilling effect, the court said it would not want an award of costs to a prevailing defendant in an employment discrimination case to deter a plaintiff with a meritorious claim from bringing it for fear of being burdened with billable costs of the litigation if he or she does not prevail. However, the court said that a plaintiff who brings a baseless employment discrimination case, such as the present case, does not advance the cause of civil rights. Accordingly, the court ordered Thomas to pay the costs in hopes that it may deter non-meritorious employment discrimination claims.
Contact for more information: Karen A. Brimmer
Each of Employee's Paychecks Constituted Separate Act of Potential Discrimination
In Reese v. Ice Cream Specialties, Inc., Reese never received the raise he claimed was due to him after working six months at Ice Cream Specialties (ICS). Three and a half years later, he claimed that ICS did not award him the higher pay rate because he was African-American and he filed suit alleging discrimination. The district court granted summary judgment in favor of ICS, holding that Reese's claim was untimely because he did not file a discrimination charge with the EEOC until years after he was denied the raise. The Seventh Circuit Court of Appeals vacated and remanded this decision, stating that Reese was successful in showing, for summary judgment purposes, that ICS gave six-month raises to similarly situated Caucasian employees, but not to him, and that ICS's conduct adversely affected every paycheck Reese subsequently received. Accordingly, the court held that Reese's suit was not untimely because each paycheck constituted a fresh act of discrimination.
Contact for more information: Thomas P. Kane
California Supreme Court Reaffirms Prevention Efforts As Defense To Sexual Harassment Claims
In Department of Health Services v. Superior Court (McGinnis) (11/24/03) the California Supreme Court reconfirmed that under California's Fair Employment and Housing Act, an employer is strictly liable for all acts of sexual harassment of an employee by a supervisor. However, the Court further ruled that the employer may limit the damages recoverable by the plaintiff employee pursuant to the avoidable consequences doctrine. The defense has three elements: (1) the employer took reasonable steps to prevent and correct workplace sexual harassment; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer's procedures would have prevented at least some of the harm the employee suffered. The defense allows the employer to escape liability for those damages, and only those damages, that the employee more likely than not could have prevented with reasonable effort and without undue risk, expense, or humiliation, by taking advantage of the employer's internal complaint procedures appropriately designed to prevent and eliminate sexual harassment. Deciding when a harassed employee has first suffered compensable harm and when a reasonable employee would have reported the harassment will be disputed factual issues. The adequacy of the employer's steps to prevent and correct sexual harassment will also be scrutinized.
Contact for more information: David I. Dalby
Department Of Labor Announces New Union Financial Reporting Requirements
Effective January 1, 2004, labor unions in the United States will be subject to new financial reporting requirements designed to help eliminate potential union misuse and mismanagement of employee dues and facilitate government oversight. The Department of Labor will require each labor organization that has annual receipts of $250,000 or more to file a Form LM-2 electronically and to itemize receipts and disbursements of $5,000 or more, as well as receipts not reported elsewhere from, or disbursements to, a single entity that total $5,000 or more in the reporting year, in specified categories. The reporting will require that expenses be broken out into two primary categories: (1) Representational Activities; and (2) Union Administration. Because unionized employees may only be compelled to pay dues to cover representational activities, as opposed to union administration activities such as political lobbying, the new reporting rules should help employees better understand what they are and are not required to pay in terms of union dues. The financial disclosures should also help employees better evaluate the costs and benefits of union representation.
Contact for more information: Thomas Y. Mandler
Hospital Employees May Be Compensated For Lunch Hours Interrupted For Work Purposes
In Beasley v. Hillcrest Medical Center, the plaintiffs, who were nurses and technicians employed by Hillcrest Medical Center, appealed the district court's grant of summary judgment in favor of Hillcrest on their claims for overtime compensation under the Fair Labor Standards Act (FLSA). The plaintiffs alleged they should have been given overtime compensation for lunch hours that were interrupted by work-related tasks. The court noted that the inquiry in this situation is whether the employee's time was spent "predominantly for the benefit of the employer," and this inquiry is "highly individualized and fact-based." Accordingly, the court considered each plaintiff's evidence individually to determine whether a factual dispute regarding the nature of each plaintiff's activities during his or her meal period was raised. The Tenth Circuit Court of Appeals reversed and remanded the lower court's decision, stating the plaintiffs raised a triable issue as to whether their "time or attention was taken up principally by official responsibilities that prevented them from comfortably and adequately passing the mealtime."
Contact for more information: Tom H. Luetkemeyer
Supreme Court Finds No Rehire Policy Properly Applied To Employee Fired For Illegal Drug Use
In Raytheon v. Hernandez, the United States Supreme Court concluded that Raytheon's unwritten policy not to rehire employees who left the company for violating personal conduct rules constituted a legitimate basis for refusing to rehire an employee forced to resign for illegal drug use. In so doing, the Court overturned the Ninth Circuit Court of Appeals, which had concluded that Raytheon's refusal to rehire Joel Hernandez, a former employee who had been previsouly forced to resign after he tested positive for cocaine use, violated the Americans With Disabilities Act (ADA). Under the ADA, drug addiction (as opposed to current or on-going illegal drug use) can be considered a potential disability which may not be factored into an employment decision. The Supreme Court rejected the lower court's finding that the employer's legitimate, nondiscriminatory reason for refusing to rehire Hernandez (its no rehire policy) constituted an unlawful "bar to the re-employment of a drug addict despite his successful rehabilitation."
Hostile Work Environment Claims Actionable Under ADA
In Shaver v. Independent Stave Company, the Eighth Circuit Court of Appeals held that hostile work environment claims are actionable under the Americans with Disabilities Act (ADA). Christopher Shaver, an employee of the defendant, alleged that he was unlawfully harassed as a result of his epilepsy and a cranial operation in which part of his brain was removed and replaced by a metal plate. After analyzing the text of the ADA, the court held that when Congress included the phrase "terms, conditions, and privileges of employment" in the Act, it was a legal term of art that prohibited a broad range of employment practices, including workplace harassment. Furthermore, the court held Shaver qualified as disabled under the ADA because his ability to think was impaired, which is a major life activity under the Act. However, the court decided the verbal harassment in this case did not rise to the same level as that in cases where it had previously granted relief.
Contact for more information: Jodi L. Johnson
Illinois Department Of Labor Releases New Required Poster For Employers
The Illinois Department has released a new poster that summarizes the Equal Pay Act of 2003 and the Victims' Economic Security and Safety Act. The combined notice satisfies the posting requirements of both of these acts. Employers are required to place the poster in a conspicuous place for employees (i.e., in a break room or on an employee bulletin board).
Contact for more information: Aimee Delaney
Court Upholds Employer's Right To Review Employee Emails And Clarifies Potential Limits
In Fraser v. Nationwide Mutual Insurance Co., the United States Court of Appeals for the Third Circuit upheld an employer's right to review employee emails stored on its own main file server. The Court specifically rejected a claim by Richard Fraser, a former employee of Nationwide Insurance, that Nationwide violated the federal Electronic Communications Privacy Act (ECPA) and parallel Pennsylvania law when it combed through its server for emails suggesting potential misconduct by Fraser. The ECPA prohibits unauthorized "intercepts" of or access to stored copies of electronic communications such as emails. In rejecting Fraser's claims under the ECPA and parallel Pennsylvania law, the Court found that Nationwide had not "intercepted" any emails because it did not review the emails contemporaneous with their transmission (i.e., they did not utilize a wire tap). Finally, the Court noted that the ECPA does not apply to seizures of emails authorized "by the person or entity providing a wire or electronic communications service." Because Nationwide provided the email service used by Fraser during his employment, Nationwide was free to review the contents of its own file server. The Court did not state whether it would have found a violation of the ECPA if Nationwide had used an outside service or file server for its company emails. However, employers who wish to review employee emails stored on an outside file server should consult with counsel for further advice to avoid a potential violation of the ECPA.
Contact for more information: Andrew B. Cripe
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.
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