1. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Recent Developments in Employment Law Joint Triad HR Leadership Conference May 17, 2011 Presented by: Alexander L. Maultsby Smith Moore Leatherwood LLP 300 North Greene Street, Suite 1400 T: (336) 378-5331 F: (336) 433-7460

2. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Hot Topics 2011 Legislative / Regulatory –ADA Amendments –Genetic Information Nondiscrimination Act –DOL Enforcement

3. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Hot Topics 2011 Courts / Litigation –Retaliation Claims –Class Actions –Discrimination

4. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Cold Topics Not Developing... –Immigration Reform –Free Choice Act –Employee Nondiscrimination Act (sexual orientation)

5. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Disabilities The Americans with Disabilities Amendments Act of 2008 –Signed by President Bush on September 1, 2008 –Effective January 1, 2009 –Regulations issued March 25, 2011

6. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Meaning of “Disability” Physical or mental impairment that substantially limits a major life activity Record of such impairment Regarded as having such impairment

7. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Disabilities “Major Life Activity” –Statutory List = the “ings” “working” –Major Bodily Functions e.g., immune system, cell growth, neurological, endocrine, reproductive, respiratory, digestive, circulatory, etc.

8. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Disabilities “Substantially Limits” – no longer means “severe” or “significantly restricted” Do not consider Mitigating Measure (other than eyeglasses or contact lenses) Conditions that are Episodic or in Remission “Disability” = Interpret Broadly

9. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. EEOC Estimates Impact of Amendments: 1 million more workers covered and protected 12-38 million disabled workers have had their coverage clarified 2-6 million more requests for reasonable accommodations $60-$180 million cost of new accommodations

10. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Genetic Information Genetic Information Nondiscrimination Act –Signed by President Bush on May 21, 2008 –Regulations issued on November 9, 2010

11. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Genetic Information Employers of 15 or more Prohibits employers from requesting, requiring or purchasing genetic information Enforced by EEOC

12. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Genetic Information - What Is It? Family medical history Results of any genetic test of employee or family member Fact that such person sought or received genetic services Genetic information about fetus carried by such person

13. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Genetic Tests “Analysis of human DNA, RNA, chromosomes, proteins, or metabolites that detects genotypes, mutations, or chromosomal changes” –Tests for genetic variant for: Huntington’s Breast Cancer Sickle Cell Anemia Spinal Muscular Atrophy Fragile X Syndrome

14. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Not Genetic Tests Tests for –HIV / AIDS –Pregnancy –Alcohol / Drug –Cholesterol

15. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Not Genetic Information Medical information on current illness (e.g., ability to work limited by Huntington’s) ADA and FMLA discussions are “present”

16. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employment Physicals

17. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Exceptions...... to the Rule Against Acquiring Genetic Information Inadvertent (water cooler; doctor’s note) FMLA certification for family member Wellness programs

18. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Safe Harbor for Inadvertent Disclosures The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. To comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information. "Genetic information," as defined by GINA, includes an individual's family medical history, the results of an individual's or family member's genetic tests, the fact that an individual or an individual's family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual's family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.

19. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Wellness Programs May involve use of genetic information Must have prior, voluntary, knowing and written authorization Genetic information may be provided by employee to healthcare provider (and vice-versa) Only aggregated information may be provided to the employer

20. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Health Benefits Cannot use genetic information to make decisions as to whether individual can participate Health benefits are a term or condition of employment Cannot refuse to hire or terminate due to anticipated health costs Title 1 limits use of genetic information in setting premiums and providing coverage

21. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. GINA = Confidentiality Safeguard Genetic Information It is illegal to disclose genetic information to third parties –Segregate it –Require a specifically worded court order –A subpoena for “personnel file” or “all employment files” is insufficient

22. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Remedies Same as Title VII Hiring, reinstatement, promotion Back pay, compensatory / punitive damages Damage caps$ 50,000 (under 100 employees) $300,000 (over 500 employees) plus attorney’s fees

23. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. DEPARTMENT OF LABOR INITIATIVES

24. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. 2011 Focus Independent Contractors Wage Payment

25. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Independent Contractors The DOL says: 3.4 million workers misclassified $3.72 billion in lost tax revenue 60% of all businesses use independent contractors Fits with goals of healthcare reform

26. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Independent Contractors Where it matters: Wage payment Workers’ Compensation and Health Insurance Payroll Taxes Employment Laws –42 U.S.C. § 1981 Union Organizing and Collective Bargaining

27. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Leased Employees v. Independent Contractors With Leased Employees –Employment Exists –Someone Handles Compensation, Benefits, Taxes –Joint Employer Issues

28. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employees v. Independent Contractors The Controlling Factor is...

29. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employees v. Independent Contractors The Controlling Factor is... Control

30. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employees v. Independent Contractors IRS Divides “Control” into 3 categories: –Behavioral Control – Who Instructs? Who Trains? –Financial Control – Compensation? Expenses? –Relationship of the parties – Contract? How does it end?

31. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employees v. Independent Contractors Relationship of Parties – Facts to Consider: –What does the Contract say? –Tax treatment / Benefits treatment –How is the Worker discharged? –Is the relationship Indefinite? –Is the work “regular business activity?”

32. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Employees v. Independent Contractors Other Factors: –Work is part-time –Work is not “on-site” –Hours are flexible

33. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Courts and Litigation in 2011 Class Actions Retaliation Discrimination

34. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Class Actions Purposes –Efficiency / Lower Costs –Remove disincentives of small individual recoveries –Prevent unfair benefit for early filers –Synthesize outcomes

35. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Class Actions Requirements: –Common questions of law or fact “predominate” over individual issues –Claims of representatives are typical of claims of the class –Very big class (impractical for all to participate)

36. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Class Actions Most Common Claims: –Discrimination –Misclassification –Wage and Hour

37. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Class Actions Dukes v. Wal-Mart –Favoring men over women in promotion and wage decisions –1.5 million women at 3400 stores since 1998 at any level –Will it be “certified” by the U.S. Supreme Court

38. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Class Actions Wage and Hour Claims –80% of all class actions by employees –Major plaintiffs’ firms are on the prowl

39. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Wage and Hour – Critical Areas Exempt v. Non-Exempt Automatic deductions (breaks, meals) Telecommunications / Remote Work Early and late “punching” “Corrections” by supervisors

40. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Wage and Hour Hefty Exposure –3 year look-back –Multiplication for number of employees affected

41. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Wage and Hour There’s an app for that??

42. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Retaliation Retaliation claims have surpassed race claims as the most frequently filed EEOC charge. RetaliationRace 36.3%35.9% and growingand flat

43. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. The Problem with Retaliation Claims Difficult for employers to defend Most adverse decisions will look retaliatory Claims stand on their own More likely to survive pretrial motion and result in trial

44. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Anti-Retaliation Laws Title VII of the Civil Rights Act of 1964 Age Discrimination Employment Act Equal Pay Act Americans with Disabilities Act Family and Medical Leave Act Fair Labor Standards Act

45. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Elements of a Claim Protected activity Adverse action Causal connection between protected activity and adverse action

46. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Protected Activity: Opposition EE explicitly or implicitly communicates a belief that ER’s activity was unlawful discrimination –Based on reasonable and good faith belief –Manor of opposition must be reasonable

47. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Protected Activity: Opposition Examples –Threatening to file a charge or other formal complaint alleging discrimination –Complaining to anyone about alleged discrimination against oneself or others –Refusing to obey an order because of a reasonable belief that it is discriminatory –Requesting reasonable or religious accommodations

48. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Protected Activity: Participation Filing a charge, testifying, assisting with or participating in any manner in the statutory process (e.g., investigations, proceedings, hearing, lawsuits) –Protected whether or not underlying discrimination charge is valid or reasonable

49. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Adverse Action: The Law Today... Burlington Northern & Santa Fe Railway Co. v. White – U.S. S.Ct. 2006 –Prohibits any employer action that well might dissuade a reasonable worker from making or supporting a charge of discrimination.” “[U]nlike a substantive provision” of Title VII, prohibited actions need not “affect terms and conditions of employment.”

50. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Who May Claim Retaliation? Thompson v. North American Stainless, January 24, 2011 (Scalia) Unlawful to retaliate against someone “because he has made a charge.” (Title VII) But, “a person claiming to be aggrieved... by the unlawful employment practice” may sue. Thus, anyone “aggrieved,” not simply the person who complained.

51. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Thompson : “Me and My Fiancé” The Court concluded: –You might not engage in protected conduct if you think it means your fiancé will be fired.

52. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Where Does It End Family Members – “almost always” Mere Acquaintance – “almost never” Supreme Court: “We decline to identify a fixed class of relationships for which third-party reprisals are unlawful.”

53. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Preventing Retaliation: The Best Defense is a Good Offense Policies Specifically Prohibit Retaliation (not just the EEO policy) –Establish procedures for reporting –Publicize / Post / Train –Emphasize zero tolerance

54. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Preventing Retaliation: The Best Defense is a Good Offense Appropriately Respond to Complaints –Immediately investigate the underlying complaint –Maintain confidentiality for underlying complaint (to the extent practicable) –Focus on fixing the problem (“effective remedial action”) –Document

55. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Preventing Retaliation: The Best Defense is a Good Offense Close the Loop –Record Reminder: No Retaliation –Check In Proactively monitor for 6 months Coach Supervisor

56. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Preventing Retaliation: The Best Defense is a Good Offense Train Supervisors to Maintain Incident File –Record of good and bad incidents –Complete while details fresh –Review with Employee without waiting for formal appraisal

57. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Subsequent Discipline Make good paper Clear expectations Reference patterns of behavior Reference prior warnings, notices Include any positives Do not reference protected activity Future consequences

58. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Subsequent Discipline Follow Policy to the Letter

59. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Discrimination Same as it ever was Cat’s Paw Theory –Staub v. Proctor Hospital

60. © 2011 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Courts Expect Employers To... Avoid effects of biased supervisors Separate when possible Rely on objective, second sources