Employment Law Observer

In the spirit of the season, we are using our annual "12 days of the holidays" blog series to address new California laws and their impact on California employers. On this ninth day of the holidays, my labor and employment attorney gave to me: nine ladies dancing and SB 1334.

When assessing potential exposure for their employer-clients under federal labor and employment statutes, employment and health care attorneys often must start with the basics. That determination of employment status becomes even more important in medical facilities, such as hospitals, which have multiple and complex levels of workers with varying levels of skills and responsibilities. This is especially true with independent medical staff members who may have other contractual relationships with hospitals—such as recruitment agreements or administrative services contracts—which can complicate these questions.

Last week, the U.S. District Court for the Northern District of Florida held that Florida can enforce a law that voids noncompete agreements between doctors and their employers. The recently adopted legislation—section 542.336, Florida statutes—voids any noncompete agreements between physicians and specialty physician groups when the group employs all the physicians practicing a particular specialty within a given Florida county. In 21st Century Oncology, Inc. v. Moody, the Northern District reasoned that the law doesn't unlawfully interfere with private agreements, and any such impairment is outweighed by the law's significant, legitimate public purposes.

On August 8, 2019, the U.S. Department of Labor – Wage and Hour Division (collectively the "DOL") issued Opinion Letter FMLA2019-2-A, which interpreted the Family and Medical Leave Act of 1993 (FMLA) to include providing intermittent family leave for a mother to attend committee meetings related to the serious health conditions of her children. The Opinion Letter expands the scope of activities eligible for intermittent FMLA leave.

Many employers incorporate wellness programs into their group health plans. Studies indicate that such programs, which can provide incentives to employees to encourage healthy behaviors, are offered by more than half of all employers who sponsor a health plan.

Earlier this afternoon the House of Representatives passed the American Health Care Act (AHCA).  While the AHCA must still get through the Senate and eventually be signed by the President before becoming law, with the passage of the AHCA employers now have a first look at how the health care landscape may change under the Trump Administration.

In 2000, M&G Polymers purchased the Point Pleasant Polyester Plant in Apple Grove, WV. At that time, M&G entered into a collective-bargaining agreement and a related Pension, Insurance, and Service Award Agreement (P & I Agreement) with the union. The P & I Agreement provided for medical coverage with a full employer contribution to be provided for the duration of the agreement, subject to future negotiations. When those agreements expired, M&G announced that it would require retirees to contribute to the cost of their health care benefits. Several retirees sued M&G in federal district court, alleging that the P & I Agreement created a vested right to a lifetime contribution of free healthcare benefits.

With the rising costs of health care benefits for both employers and employees alike, a recent case out of the Eighth Circuit provides an important reminder that even seemingly innocuous cost control measures can have a discriminatory impact and can land an employer in hot water.

On July 2, 2013, the Treasury Department announced a one-year delay in several aspects of the Affordable Care Act that were to become effective on January 1, 2014. Among those items that are delayed are various employer and insurer reporting requirements under sections 6055 and 6056 of the Act, as well as the penalties imposed on large employers for failing to offer coverage.

The Seventh Circuit Court of Appeals has reminded one Illinois physician that he only gets one bite at the apple when it comes to federal discrimination claims— and the case presents a unique and potentially powerful new defense for employers of physicians and other regulated professionals. The case, Dookeran v. County of Cook, No. 11-3197 (7th Cir. May 3, 2013), arose when the defendant hospital denied the plaintiff physician’s reappointment following his two-year review, during which he acknowledged for the first time that he had been reprimanded by his former employer for creating a hostile work environment. The physician subsequently filed suit in Illinois state court requesting judicial review of the hospital’s decision under a writ of common-law certiorari and, at the same time but in a separate EEOC action, he lodged charges of race and national origin discrimination. The Illinois courts upheld the decision to deny his privileges in the certiorari suit. Shortly after that state court proceeding had concluded, however, the physician received an EEOC right-to-sue letter and filed a second lawsuit against the hospital in federal court. 

Several years ago, the Federal Office of Contract Compliance Programs (OFCCP) requested that three Pennsylvania hospitals provide copies of affirmative action plans and other materials required of Federal Contractors. Each hospital had a Health Maintenance Organization (HMO) contract with the UPMC Health Plan to provide medical products and services to United States Government employees pursuant to a contract between the Health Plan and the United States Office of Personnel Management (OPM). The hospitals resisted the audits by the OFCCP arguing that their provision of medical care through the HMO plans did not render the hospitals government contractors or subcontractors and that their contracts specifically stated that the hospitals were not to be considered subcontractors. The Department of Labor’s Administrative Review Board ruled in favor of the OFCCP.

A hospital challenged the National Labor Relations Board's (NLRB) certification of the union as the representative of a "wall to wall" bargaining unit of the hospital's professional and non-professional employees. The hospital claimed that the Health Care Rule (which limited the number and type of bargaining units allowed in an acute care setting) violated the National Labor Relations Act, Section 9(c)(5) because it endorsed the extent of a union's organization as the controlling factor in determining bargaining units. The D.C. Circuit Court of Appeals, however, rejected this argument, as well as the hospital's argument that the NLRB violated the Rule because the union was required to show, and the Board was required to find, extraordinary circumstances to join together a number of the Rule's designated units. The Court of Appeals, however, found that such a showing was not required under the Rule.

A Florida food products wholesaler unilaterally changed the health care plan for its bargaining unit employees twice in two years. Each change led to increased premiums and copayments for the unionized employees. The administrative law judge (ALJ) and reviewing bodies that subsequently reviewed these facts agreed that the unilateral change violated Section 8(a)(5) of the National Labor Relations Act, but disagreed about the appropriate remedy. The ALJ ordered the wholesaler to: cease and desist from changing the health plan; restore the health coverage in place prior to the unilateral changes, upon the union’s request; and make the employees whole for losses suffered as a result of the unilateral changes. A two-member National Labor Relations Board (NLRB) modified the remedy to eliminate the make whole relief if the union exercised its option to retain the final unilaterally implemented health insurance plan. The case eventually was argued before the U.S. Supreme Court, which remanded it after ruling that at least three members must convene in order to exercise the delegated authority of the NLRB. On second review, the four-member NLRB unanimously restored the make whole-relief award, regardless of whether the union requested rescission of the health care plan change. In doing so, the NLRB found that its earlier remedy was based on mechanical adherence to Brooklyn Hospital Center, 344 NLRB 404 (2005), a decision that itself ignored 40 years of NLRB precedent, without explanation. The unanimous NLRB held that a make-whole remedy is a fundamental element of the Board’s remedial approach. Make-whole relief fully compensates employees for economic losses caused by unfair labor practices. Also, it operates as a financial disincentive against the commission of unlawful unilateral changes. Employers should note that unlawful unilateral changes that result in economic losses to unit employees are recoverable independent of a union’s judgment on whether to seek rescission.