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Wednesday, November 4, 2015

Missouri Appellate Court Rules Sexual Orientation Discrimination Not Actionable Under Missouri Human Rights Act

On October 27, 2015, the Missouri Court of Appeals, Western District, in a case of first impression, held that employees could not state a cause of action for discrimination or harassment based on sexual orientation or preference under the Missouri Human Rights Act (“MHRA”).  Pittman v. Cook Paper Recycling Corp., 478 S.W.3d 479 (Mo. App. W.D. 2015).  In Pittman, a male homosexual employee filed a lawsuit under the MHRA claiming that he suffered discrimination and hostile work environment due to his sexual preference, alleging that the president of the employer made several highly insulting and derogatory remarks to the employee and treated him differently than heterosexual co-workers.  The trial court granted the employer’s motion to dismiss, which was appealed by the employee.

In a 2-1 decision, the appellate court’s majority opinion affirmed the dismissal and held unequivocally that the “Missouri Human Rights Act does not prohibit discrimination on the basis of sexual orientation.”  In so holding, the majority opinion strictly interpreted the MHRA’s language and found that it prohibits discrimination based only on “sex” – which by dictionary definition means only “one of the two divisions of human beings respectively designated as male or female.”  The majority also relied on the fact that the employee had alleged sexual preference discrimination, not sex discrimination.  The majority stated that it was bound by the language of the MHRA and could not rewrite it.  It found persuasive that Missouri, unlike other states, has not enacted legislation prohibiting sexual orientation discrimination, which tends to show that the Legislature did not contemplate barring such discrimination.

The lengthy dissenting opinion included interpretational and policy grounds to support inclusion of sexual orientation discrimination in conduct prohibited by the MHRA.  First, in using the same dictionary definitions, the dissent interpreted “sex” to include sexual orientation because sexual orientation is inherently a sex-based consideration.  The dissent further noted that the MHRA should be broadly construed in favor of applicability of the statute.

Currently, the Missouri Supreme Court is deciding whether or not to accept transfer of the case, which it could do based on the lengthy dissent and the important issues in the case.  It should be noted that Missouri appellate courts have previously held that same-sex discrimination and harassment is prohibited by the MHRA.  We will monitor this issue because the recognition if a MHRA claim for sexual orientation discrimination exists, then employers must account for it in policies, practices, and employee training.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and Kevin A. Sullivan.


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Tuesday, September 15, 2015

National Labor Relations Board’s Expanded Joint-Employer Standard

On August 27, 2015, the National Labor Relations Board (“NLRB”) broadened the joint-employer standard under the National Labor Relations Act (“NLRA”) in Browning-Ferris Industries of California d/b/a BFI Newby Island Recyclery, Case 32–RC–109684.  This is a significant decision because it modifies long-standing precedent.  Generally, two entities are joint employers if (1) they are both “employers” within the meaning of the common law and (2) they share or codetermine those matters governing the essential terms and conditions of employment.  Previously, the NLRB had held that the second factor is met if the employer has “direct and immediate” control of the employees.  However, under the NLRB’s new interpretation in Browning-Ferris, the second factor now can be established by the simple “right to control” possessed by an entity or by its “indirect control” of employment matters.  

In the Browning-Ferris case, BFI used a staffing agency.  The agency was highly involved in the day-to-day affairs of BFI’s employment matters; it was responsible for hiring, paying, offering pay increases to, supervising, disciplining, and firing its temporary workers.  But despite the agency’s apparently singular control of the terms and conditions of those workers’ employment, the NLRB found that BFI was a joint employer.  The NLRB’s decision was based in part on the contract between the parties, which reserved BFI’s right to participate in many employment decisions, even though the NLRB acknowledged that BFI did not in fact exercise such powers.  This “right to control” the temporary workforce, along with BFI’s “indirect control” over temporary workers by its control of the facility itself and of the logistics of the recycling line, was enough to create a joint-employer relationship under the NLRB’s restated test.  The NLRB’s stated intent of the new interpretation is to better effectuate the purposes of the NLRA, by accounting for the fact that over 2.87 million American workers are now employed through temporary agencies and are thereby subject to somewhat unique employment relationships.

This decision may impact your business to the extent that it is subject to the NLRA and its contracts, or otherwise works with, temporary staffing agencies, or other contractors.  This expansion of the joint-employer standard creates a greater risk that an employer will be found to be a joint employer and therefore could be subject to union organizing activities by, and possible collective bargaining obligations with, employees of such agencies or contractors.  Therefore, these arrangements, including written contracts, should be carefully analyzed and structured to avoid joint employer status.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert, D. Leo Human, and Erin M. Leach.


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Tuesday, September 1, 2015

Department of Labor’s Expanded Definition of Employee under FLSA

On July 15, 2015, The United States Department of Labor’s Wage and Hour Division released an Administrator’s Interpretation, which broadly defines an “employee” under the Fair Labor Standards Act (“FLSA”) so that most workers would be classified as employees, not independent contractors.  The Administrator’s Interpretation applies an “economic realities” test to the FLSA’s broad “suffer or permit” employment standard to conclude that an employer “suffers or permits” an employee to work if that individual is dependent on the entity as a matter of economic reality.

The economic realities test examines six factors to determine whether a worker is an independent contractor: (1) whether the work is an integral part of the employer’s business; (2) whether the worker’s managerial skill affects profits; (3) the investment of the worker; (4) whether the worker’s job requires special skills; (5) the permanence of the worker’s relationship with his employer; and, (6) the degree of the employer’s control over the worker.  One of the more significant changes to the economic realities test is that a comparative analysis is now required to analyze the worker’s investment versus the employer’s investment in the enterprise.  Additionally, a worker’s independence is no longer conclusively proven by the ability to flexibly schedule their work.  The full text of the Wage and Hour Division’s Administrative Interpretation, which includes a thorough discussion of all six factors, can be found here.

Obviously, employee status under the FLSA triggers employer obligations, including payment of overtime.  Both the DOL and plaintiffs’ lawyers aggressively pursue employee misclassifications.  Even though the Administrator’s Interpretation is not binding on courts, they likely will defer to it.   As a result, employers should reexamine their current relationships with independent contractors to determine if workers are properly classified under this Administrator’s Interpretation.  Any semblance of a permanent or indefinite relationship with an independent contractor should be avoided, and the terms of the relationship or the specific project should be spelled out in the agreement.  Moreover, companies should refrain from giving independent contractors rights and access that militate against their status as independent contractors. 

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and Kevin A. Sullivan.


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Wednesday, July 15, 2015

Impact of Supreme Court’s Same-Sex Marriage Decision on Employee Benefits

On June 27, 2015, the United States Supreme Court held that marriage between same-sex couples is a fundamental right under the Fourteenth Amendment’s due process and equal protection clauses.  Obergefell v. Hodges, 135 S.Ct. 2584, 575 U.S. ___ (2015).  Although further litigation may occur, this ruling clears the way for same-sex marriage in all 50 states.  This ruling is significant for employers because same-sex couples will now probably be entitled to state marriage and company spousal benefits.

Since marriage triggers multiple workplace benefits, employers should reexamine any policies implicating spouses and those that may define marriage along gender-specific lines. The most relevant benefits affected by this decision are health, bereavement, retirement and fringe benefits.  Leave policies, including FMLA policies, should also be examined. Many employers likely have already begun this process in the wake of the Supreme Court’s decision in U.S. v. Windsor, 133 S.Ct. 2675, 570 U.S. ___ (2013), which held federal benefits could not be denied to validly married same-sex couples, and Barrier v. Vasterling, No. 1416-CV03892 (Jackson Cnty. Cir. Ct., Oct. 3, 2014), where a Missouri court ruled same-sex couples could not be denied benefits under state law. It is also important to note that Obergefell neither creates a new protected class under Title VII nor expands any discrimination laws.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and D. Leo Human.

 


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Monday, June 8, 2015

Supreme Court Holds Employer’s Actual Knowledge Not Required for Religious Discrimination Claim

On June 1, 2015, the United States Supreme Court held that in order to prevail on a Title VII religious discrimination claim, an employee did not need to prove that the employer had knowledge of a request for a religious accommodation, but only needed to prove that the employer’s desire to avoid an accommodation was a motivating factor in an employment decision.  E.E.O.C. v. Abercrombie & Fitch Stores, Inc., 135 S.Ct. 2028, 575 U.S. ___ (2015).  In that case, Abercrombie & Fitch refused to hire an otherwise qualified Muslim woman, who wore a headscarf, because the wearing of the headscarf conflicted with the dress policy, which forbade any headwear.  The applicant did not request to wear the headscarf, but the hiring manager believed she would.  Because Title VII requires an employer to reasonably accommodate a religious observance or practice, the employer argued that actual knowledge of the need for a religious accommodation was necessary for an employer to be found liable.  The Court rejected that argument and found that the employer’s knowledge of an accommodation request was not an essential element of a religious accommodation discrimination claim because Title VII had no such knowledge requirement.  The Court held that “the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward:  An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.”

This decision has several practical consequences for employers.  First, an employer should neither assume that an employee is a strict adherent to any religion nor base any employment decision on that assumption.  An employer’s intent to avoid even a prospective religious accommodation for an employee can give rise to liability.  Second, an employer should likewise carefully monitor its policies with respect to an employee’s religious practices:  an employer must be flexible when it comes to applying such policies to religious practices.

However, an employer is not required to accede to every religious-based request. To reject an accommodation, an employer must demonstrate that the accommodation would place an “undue hardship on the conduct of the employer’s business,” such as safety, infringement on other employees’ rights, conflict with a collective bargaining agreement, or costliness.  Similarly, the accommodation must be reasonable, and the employer and employee should engage in an interactive process to address concerns.  And if there is a legitimate doubt about an accommodation request, an employer can perform a limited inquiry to ensure that the religious belief is sincerely held by the employee.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and Kevin A. Sullivan.


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Friday, April 24, 2015

Supreme Court Provides Accommodation Protection for Pregnant Employees

The United States Supreme Court held, in a March 25, 2015 decision, that employers must either accommodate pregnant employees to the same degree as they accommodate other employees “similar in their ability or inability to work,” or show a legitimate, nondiscriminatory reason for refusing to do so.  Young v. United Parcel Service, 135 S.Ct. 1338, 575 U.S. ___ (2015).  This means that if employers allow such accommodations as light duty assignments, leave or flextime for employees with temporary disabilities, on-the-job injuries, or otherwise, then they likely must offer the same accommodations to similarly situated pregnant employees or face potential liability under the Pregnancy Discrimination Act unless they have a legitimate non-discriminatory reason for refusing.  An undue burden on the employer may constitute such a reason.

Young represents a shift in the law in that it allows pregnant employees to demand the same treatment that is being offered to disabled, injured, aged, or other employees whose work ability is comparable to the pregnant employee’s.  The employee need not have direct evidence of discriminatory statements or animus, but only circumstantial evidence to meet her burden of proof that she was treated differently than others who were similarly unable to perform their job functions.  For example, the pregnant UPS driver in Young offered statistical evidence of how often pregnant versus non-pregnant employees were allowed to work under lifting restrictions to create an inference that UPS’s stated reason for placing her on unpaid leave (a 70-pound lifting requirement) was only a pretext for pregnancy discrimination.

Therefore, Young is a reminder that care must be taken when applying an employer’s workplace accommodation policies to pregnant employees.  Employers should consider whether to revise their light duty policies and, if faced with specific situations involving possible accommodations for pregnant employees, employees should carefully analyze how employees with similar restrictions are accommodated.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert, D. Leo Human, and Erin M. Leach.


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Tuesday, March 10, 2015

EEOC Statistics Fiscal Year 2014

The EEOC recently released its Fiscal Year 2014 statistics, summarizing the data collected from its year ending September 30, 2014.  The full report and access to the data tables can be found here.

The EEOC reports that it received 88,778 charges last year.  This is a decrease from recent years, which the EEOC attributes at least partly to the 2013 government shut-down.  42.8% of 2014 claims were based on allegations of retaliation.  This is up from last year, indicating once again that employers must carefully consider any potential adverse employment action not only for possible discrimination against a protected class, but also to avoid the appearance of retaliation or other unlawful conduct.  Other claims most often alleged were race, sex, disability, and age discrimination, in that order. 

Enforcement proceedings administered by the EEOC itself garnered $296.1 million in total monetary relief in 2014, and the EEOC's litigation program collected $22.5 million.

Not surprisingly, the most complained of practice was again discharge.  However, 30% of all charges in Fiscal Year 2014 alleged harassment of some type, including sexual or racial harassment.  This is an increase from prior years.  The take away from these statistics is that employers should be proactive in educating employees about their obligations under the law.  We believe that training to properly and fairly evaluate, discipline, supervise, and otherwise deal with employees is a key element in reducing charges of discrimination.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert, D. Leo Human, and Erin M. Leach.


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Thursday, January 15, 2015

National Labor Relations Board: Employees May Use Employer’s Email System for Protected Communications

The National Labor Relations Board (“NLRB”) held in a 3-2 decision last month that employees who are given access for work purposes to their employer’s email system are presumptively permitted to use that system to engage in communications protected by Section 7 of the National Labor Relations Act (“NLRA”).  Purple Communications Inc. and Communication Workers of America, 361 N.L.R.B. No. 126 (Dec. 11, 2014). Section 7 covers all “concerted” communications that support employee interests, including general discussions of the terms and conditions of employment, and applies to both union and non-union workplaces.  These protections do not apply to employees of Missouri local governmental entities that are not governed by the NLRA, but Purple Communications may still be useful by analogy when considering a public employer’s obligations under Missouri law applicable to public employees.

Purple Communications reverses previous NLRB precedent, which held that employers could prohibit non-work use of their email systems as long as restrictions were applied consistently and in a manner that did not discriminate against Section 7 activity. As permitted by this previous precedent, many employers have policies that restrict email to “business use.” Following Purple Communications, these policies may now be subject to legal challenge. Consequently, employers should review their email and technology policies to ensure compliance with the Purple Communications decision.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert, D. Leo Human, and Erin M. Leach.


Friday, December 12, 2014

Supreme Court: Wait-Time for Security Screening not Compensable under the FLSA

The Supreme Court held in a 9-0 decision this week that employees who were required to pass through anti-theft security screenings at the end of each work day were not owed for the time spent waiting in line, emptying their pockets, and passing through metal detectors, because that time was not compensable under the Fair Labor Standards Act (“FLSA”). Integrity Staffing Solutions, Inc. v. Busk, et al., No. 13-433 (Dec. 9, 2014).

The case, brought by employees in a Nevada Amazon.com warehouse, required the Court to interpret the FLSA and the Portal-to-Portal Act, which essentially provide that a work activity is compensable if it is “an integral or indispensable part” of the employee’s principal work activities. The Supreme Court held that an activity is integral and indispensable, and therefore requires compensation under the FLSA, if: (a) it is an intrinsic element of the activities which the employee is employed to perform; and (b) the employee cannot dispense with the activity and still be able to perform his principal activities. Stated simply, the activity must be a direct and essential part of the performance of the employee’s core responsibilities. The Court then held that passing through security was not part of the duties the warehouse workers were hired to perform and would not have affected the performance of their packing and shipping duties if it had been eliminated. Therefore, the Court ruled that the employer properly regarded the waiting in line and screening time as off the clock.

While this case controls with respect to time spent for certain employer security measures, it may have broader application to those employers that require, or are considering requiring, employees to perform non-essential activities off the clock. It provides a test to determine whether those activities are compensable under the FLSA, which employers can apply to attempt to avoid violations.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert, D. Leo Human, and Erin M. Leach.


Friday, December 12, 2014

Transactional Legal Malpractice Cannot Be Shown By Speculative Better Deal

This summer’s decision by the Missouri Supreme Court in Nail v. Husch Blackwell Sanders illustrates the inherent difficulty a legal malpractice plaintiff faces when trying to prove causation in a transactional case.  In Nail, the court held that the plaintiff failed to show that, but for the law firm’s allegedly negligent drafting of a settlement agreement, he would have obtained a more favorable outcome.  Summary judgment in favor of the defendant law firm was therefore affirmed.

The plaintiff in Nail argued multiple theories of liability, one of which was that a settlement agreement he entered into with his former employer relating to certain stock options was negligently drafted by the law firm in that it did not require the employer to place particular documents in escrow and this failure prevented him from being able to enforce the settlement agreement’s liquidation clause.  The court held that, to prevail on this theory, the plaintiff had to prove that the former employer would have agreed to include the necessary provisions in the settlement agreement and, further, that the former employer would later have breached them.  The plaintiff did not offer any evidence that the former employer would have agreed to any of these provisions or that the former employer would have breached them.  The court characterized the plaintiff’s hypothesized claim as “pure speculation.”

The Missouri Supreme Court’s holding is the latest in a line of legal malpractice cases involving transactions and, in particular, settlement agreements, in which the courts have rejected plaintiffs’ claims as being too speculative.  In the 2013 Bryant v. Bryan Cave case, the Eastern District of the Missouri Court of Appeals similarly rejected on causation grounds a legal malpractice plaintiff’s claim against a law firm for negligently failing to address certain issues in an antenuptial agreement.  The court of appeals rejected as speculative all types of evidence submitted by the plaintiff—including expert testimony—that his wife would have agreed to his changes.  The court of appeals acknowledged the difficulty in proving such a claim, but nevertheless rejected plaintiff’s claim on summary judgment.

In light of these cases, it is hard to conceive of a situation, short of direct evidence of an actual agreement, in which a legal malpractice plaintiff would be able to prove in a transactional situation that its then-opposing party would have agreed to terms more favorable to the plaintiff.  Courts thus far have consistently held that such claims are inherently speculative.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our legal malpractice defense lawyers if you have any questions.

This update was prepared by Robert F. Murray and D. Leo Human.


Wednesday, August 27, 2014

Missouri Supreme Court: At-Will Employment Not Sufficient Consideration for Arbitration Agreement

The Supreme Court of Missouri’s primary holding in a 4-3 decision last week in Baker v. Bristol Care, Inc., is that continuing at-will employment does not constitute consideration to make an arbitration agreement enforceable.  This holding may negatively impact some Missouri employers’ ability to enforce current arbitration agreements with their employees.

In that case, Bristol Care, Inc. (“Bristol”) and Baker entered into an agreement to arbitrate employment disputes, which was executed contemporaneously with Baker’s promotion.  The agreement also included certain new terms of employment, including stricter limits on Bristol’s ability to terminate Baker and the offer of severance pay under certain conditions.  However, the Court held that the indefinite duration of Baker’s employment coupled with the company’s right to terminate her without cause compelled the conclusion that her employment remained at will, and therefore, that there was no consideration for the arbitration agreement.

The Court also held that provisions giving Bristol a unilateral right to modify, amend or revoke the arbitration provision made the mutual promises to arbitrate illusory.  These mutual promises were therefore also not sufficient consideration to support the agreement, although the Court suggested that such a provision that applied only prospectively may be acceptable.  The dissent, by contrast, reasoned that the contract, including the arbitration agreement, was supported by consideration because the contract was mutually enforceable, and would have upheld the arbitration agreement on that basis.

Baker follows the trend of recent Missouri appellate cases, which have held that continued at-will employment is not sufficient consideration to support arbitration agreements.  It also delineates certain provisions that may render a mutual agreement to arbitrate employment disputes unenforceable.  The Court’s decision does not currently mean that all agreements to arbitrate employment disputes are unenforceable.  Rather, employers who desire to bind their employees to arbitration of employment disputes must carefully review their arbitration agreements to ensure that they are supported by consideration and otherwise comply with Missouri law.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and D. Leo Human.


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