Tuesday, November 18, 2014

LGBT legislation in Michigan

A bill was introduced in the Michigan House last week which would amend the Elliott-Larsen Civil Rights Act to prohibit discrimination based on sexual orientation.  The legislature is in its post election lame duck session, and the bill was introduced by a representative who lost in the primary election.  The bill would add sexual orientation to the protected classes set forth in the statute.  It would define sexual orientation as having an orientation for heterosexuality, homosexuality, or bisexuality or having a history of such orientation or being identified with such an orientation.

A controversy has developed because the bill did not include protection for transgender employees.  Democrats and LGBT advocates are taking the position that the bill should be defeated.  Transgender employees would still be subject to discrimination.  Or would they?

The EEOC recently filed a lawsuit against a Detroit based funeral home.  It was one of two lawsuits filed by the EEOC in an attempt to use Title VII of the 1964 Civil Rights Act to challenge transgender discrimination.  The complaint alleges that the funeral home fired a transgender woman because of sex and failed to provide females with work clothing while providing clothing to the male employees.

Specifically, the complaint alleges that when the employee told her employer and fellow employees that she was under going gender transition and intended to dress as a woman in appropriate business attire, the owner told her that what she was proposing to do was unacceptable and fired her.  The theory is that the employer engaged in sex discrimination because the employee is transgender and because she did not conform to the employer's gender-based preferences, expectations, and stereotypes.

While the proposed Michigan amendment does not include protection for transgender employees, the EEOC has taken the position such discrimination is prohibited by Title VII.  The theory is based in part on the U.S. Supreme Court's decision in Price Waterhouse v. Hopkins that discrimination based on sexual stereotypes is prohibited under Title VII. The lawsuit which is one of the first filed shows the EEOC is serious in its position. The answer to the question of whether the approach to LGBT protection  should be "all or nothing" will be known in the coming weeks.

Monday, November 17, 2014

The UAW and VW: You can't always get what you want..

But if you try sometimes you find you get what you need.  The Rolling Stones, 7/69

VW announced the creation of a policy at its Chattanooga plant dealing with the ability of employees to form groups and to have those groups deal with plant management.  The Community Organization Engagement policy establishes different levels of engagement depending upon how many employees are members of the group.

An organization that has 45% or more of the employees as members is entitled to: use the conference center during non work times; invite external representatives to come in once a month; post on a dedicated posting board; meet bi-weekly with plan HR; and meet monthly with the plant executive council.  The policy identifies thresholds of 15%, 30%, and 45%.

The policy establishes a procedure for determining the level of employee participation. An organization must provide a list of enrolled members for verification along with a written certification that it has signed individual membership authorizations for each member listed.  The information is submitted to an independent external auditor which will verify the list by checking it in either in full or taking a representative sample against the active employee roster.  Whether a group has a membership will be determined based on the total, active headcount in the relevant employee group--hourly, salary, or both--depending on the group's stated scope. VW will then be notified only of the % support without any individual account information being provided.

The UAW local sent a letter to its members last week that it will work with the company to verify its membership level which in excess of the majority of the workers of the plant.  According to the policy, it cannot be used by any group to claim or to request recognition as the exclusive bargaining representative of any group of employees for collective bargaining.  Any group requesting recognition as the exclusive bargaining partner must fully comply with the National Labor
Relations Act and do so in accordance with its provisions and practices.

To those familiar with the NLRA and the recognition procedure, the policy sounds an awful lot like a card check procedure.  On its website, the NLRB has a page dealing with elections.  It identifies a procedure that is an alternative to the Board conducted election.  That procedure allows an employer to recognize a union "after showing majority support by signed authorization cards or other procedure.

So, what is the impact if the UAW invokes the procedure and the external auditor finds that the UAW represents a majority of the employees in a unit of plant production employees which is identified by the union as the stated scope of participation?  The procedure looks like an "other procedure"  for recognition.  The provision of the policy dealing with recognition that a party seeking recognition must comply fully with the provisions and practices of the NLRB;  voluntary recognition after a showing of majority status, as recognized on the NLRB's website, has long  been recognized by the NLRB.  The policy looks like a way to end the plant's status as the only non union VW plant in the world.

Sunday, November 9, 2014

Employer loyalty: baseball style

Employee loyalty begins with employer loyalty.  Your employees should know that if they do the job they were hired to do with a reasonable amount of competence and efficiency, you will support them.  Harvey Mackay

Imagine that you are an executive who just completed your first year on the job.  At your evaluation, you were praised for the work you did and discussed plans for the upcoming year.  Now imagine that less than three weeks later, you are told that you are being replaced and are offered another job in the organization.  It seems that the company found someone who it believed could do your job better.  Now you understand what "at will" employment really is.

You now can understand how Rick Renteria, the former manager of the Cubs, feels.  Theo Epstein, president of the Cubs acknowledged that the Cubs faced a dilemma:  loyalty to the individual or to the organization.  Because Joe Madden was suddenly available as a manager and presented a unique opportunity for the club, Epstein said that the organization as priority over any one individual.

Employers are often dismayed when employees suddenly leave without much notice and are not available to transition another employee who fills the position.  The workplace today is different than in the days when there was a true sense of loyalty.  No doubt the Renteria firing has had an impact on other Cub employees and employees in general.  Workers are more mobile and connected and aware of opportunities.  Loyalty is a two way street, and so is opportunity.  It is the reality of the workplace today.  The Cubs just reminded us again.

Monday, October 27, 2014

Opening a door? Michigan's medical marijuana law and unemployment benefitsIn

In Braska v. Challenge Manufacturing Co.,  the Michigan court of appeals considered consolidated appeals concerning  whether an employee who, after using medical marijuana in accordance with Michigan's statute and who was discharged after testing positive on a drug test at work, could be denied unemployment benefits.  The court affirmed the circuit court cases which overturned the decisions of the Michigan Compensation Appellate Commission which had disqualified the employees from receiving benefits.

The court of appeals reviewed the immunity section of the statute which provides that a patient who possesses a card shall not be subject to penalty in any manner or denied any right or privilege including but not limited to civil penalty or disciplinary action by a business or occupational or professional licensing board for the use of medical marijuana in accordance with the statute.  There was no argument that the employees in question misused the medical marijuana and therefore, the issue focused on whether the denial of benefits was a penalty.

The panel reviewed a Michigan Supreme Court case which referenced a dictionary to define "penalty" and stated it was a punishment imposed for the violation of law or rule.  Since the word was modified by the phrase "in any manner," the Court held that immunity was to be given the broadest application and applies to both civil and criminal penalties. The court rejected the Department's argument that the employees were terminated for failing a drug test and not for marijuana use.  The panel stated that the employees would not have been failed but for the marijuana use.

The Department also argued that the 6th Circuit's decision in Casias v. Wal-Mart Stores, 695 F. 3d 428 (6th Cir. 2012) supported the argument that the statute did not apply to private employers.  Casias held that the immunity provision did not apply to the termination of an employee for using medical marijuana since the statute did not apply to private employers.

The panel noted that the Casias decision is not binding on the court and that the issue of whether the immunity clause applies in cases involving actions solely by private employers was not before it.  The denial of benefits involves state action and not employer conduct.  The panel emphasized that the only reason the employees tested positive was that they used medical marijuana; the denial of benefits was therefore a penalty.

Do employers need to be concerned about the validity of zero tolerance drug policies with testing as it pertains to employees who are covered by the statute?  The Michigan law is the result of a ballot initiative and no the product of the normal legislative process.  It was promoted by groups obviously in favor of the use of medical marijuana, and the immunity clause is broad.  Is termination for failing a drug test a "penalty" and isn't discharge a "disciplinary action by a business?"  After Casias, employers thought they were protected.  It is not as certain now, and the issue is likely to wind up before the Michigan Supreme Court.

Friday, October 24, 2014

Not your typical independent contractor case

The Michigan court of appeals does not frequently have the opportunity to review cases dealing with the issue of whether an individual is an independent contractor or an employee.  In Cole v. Bada Bing Club and Atlantis Lounge , the court reviewed the issue in, to say the least, an unusual fact setting.

The plaintiff was beaten in the basement of the Bada Bing Club by the club's manager and three other individuals.  He was taped to a chair; beaten and hit with a gun; and drilled through the hand with an electric drill.  The four men were convicted of criminal charges, and the plaintiff sought damages from Atlantis Lounge, the club's owner for vicarious liability for the manager's conduct and negligence is hiring and supervising the manager.  The trial court determined that the manager was an independent contractor and therefore the lounge could not be held liable.

The court of appeals affirmed the dismissal.  The court found that the manager hired and fired the employees; paid the expensed of the club; maintained financial records; and made decisions about the business.  The manager paid a set amount in rent each month to the Atlantis lounge to run the club and paid himself from any profits that were made.  The lounge owner came to the club once a week to collect rent and did not direct the manager's work activities or otherwise exercise control over the manager. The lounge's owner and the manager testified that they had a verbal agreement giving the manager control over the club.  Plaintiff did not produce any evidence to refute the defendants' facts.

On appeal, the plaintiff argued that the court should apply the economic realities test rather than the control test.  The court noted that the economic realities test applied to the determination of employee status in the context of administering social legislation such as workers' compensation.  The control test applies in tort actions to determine whether a defendant has exercised control over an individual so as to give rise to tort liability.  The right of control test considers who controls the work, the hours, the process, and the methods of work involved.  Where the emphasis is on the result and not the ability to control the method of work, the individual at issue is an independent contractor.  The court noted that the plaintiff had failed to identify any non-delegable duty on the part of the owner.

The ultimate moral of this case may well be to choose your evening activities wisely.

Thursday, October 16, 2014

Microsoft and protected concerted activity under the NLRA: A chilling effect?

Employers are now well aware that the NLRB is reviewing their policies, procedures, and employee handbooks to see if there is either a direct prohibition against employee conduct protected under § 7 of the NLRA or if there is a "chilling" effect on those rights.  Employers are also finding out just how expansive the scope of protected concerted activity is under the Obama Board.  Against this backdrop, Business Week posted an article concerning comments made by Microsoft's CEO concerning female employees asking for wage increases and whether the comments might violate the Act. 

The CEO stated,  It's really not asking about a raise, but knowing and having faith that the system will actually give you the right raises as you go along.  And that, I think, might be one of the additional superpowers that quite frankly women who don't ask for a raise have.  Because that's good karma.  It'll come back, because that is the kind of person that I want to trust.  That's the kind of person I want to really give more responsibility to.  The CEO subsequently apologize and retracted his statements, noting that he was completely wrong.

Former NLRB Chair Wilma Liebman was quoted in the article as saying the comments fall into a "contentious" area.  The comments could be the basis of an argument that if you ask for a wage raise, you are not going to be trusted and if you are not trusted, you might be in jeopardy.  The article noted the  differing views on whether action taken in response would constitute concerted activity.

Employers would do well to remember a decision in which  Chair Liebman participated.  In Parexel International LLC,  an employee was terminated after complaining to a supervisor that the company favored South African employees with respect to pay raises.  The supervisor asked the employee if the employee had discussed the issue with other employees, and the employee responded that she had not. She was fired a week later.  In a 2-1 decision, the Board found that the termination was a pre-emptive strike to prevent the employee from engaging in protected concerted activity.  The termination prevented the employee from addressing the issue in the workplace and had the effect of keeping other employees is the dark about these matters, thereby preventing them from inquiring further into perceived wage discrimination.

Would there be a basis for a claim, notwithstanding the retraction, that the CEO's comments constituted a pre-emptive strike as recognized by former Chair Liebman?  Under the Bush Board, such a claim would have little chance, but under the Obama Board, the comments might be viewed as chilling protected concerted activity of seeking wage increases.  The fact the NLRA's ramifications of the comments are being discussed at all is an indication that employer actions will be viewed through the filter of the broadened interpretation of protected concerted activity.

Tuesday, October 14, 2014

Jimmy John's and non compete agreements: Secrets of the sandwich?

The Huffington Post posted a story concerning Jimmy's Johns use of non compete agreements with its employees and the filing of a proposed class action challenging the agreements.  The non compete prohibits former employees from working within 2 years of employment for any business which derives more than 10% of its business from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches within 3 miles of any Jimmy John's location.  The breadth of the geographic scope in the Greater Detroit area can be seen by accessing the on line store finder and looking at the overlap of the stores.  A former Jimmy John's employee in the suburban Detroit area would be unable to work virtually anywhere in a large area north and west of the city.  In addition, a former employee may not work for any Jimmy John's for a 12 month period following termination for any reason.

Under Michigan law, an employer may obtain a non compete agreement which protects its reasonable competitive business interest provided it is reasonable with respect to its duration, geographical area, and type of employment or line of business.  It is difficult to imagine what it is that a non manager employee might possibly know that would warrant a 2 year non compete barring employment in the restaurant industry. Secret sauce?   Imagine a former employee inquiring during an employment interview whether 10% of the business comes from selling sandwiches in question and the reaction to the question.  An employer cannot prohibit the employee's use of general knowledge or skill.  Reasonableness takes into account  the status of the employee and the competitive risk to the employer's business.

Perhaps there is something that Jimmy John's employees are exposed to that would justify the non compete agreement.  It appears, however, that the agreement is simply not reasonable or, more importantly, needed to protect the business.  Many employers incorrectly view non compete agreements as a way of keeping a former employer from working in the particular business.

The story suggested that the agreement with the limited future employee opportunities would keep employees "from rocking the boat" like trying to unionize the company.  It is more likely that the agreement will serve as an incentive to bring a union in to balance the difference in power and to remove burdensome conditions of employment.  Employees may view their situation as one where it is easier to bring in a union than to live with the specter of being sued at a new employer.