A recent decision by the Supreme Court involving consumer arbitration agreements is likely to be applied to disputes involving arbitration agreements in employment agreements or handbooks.  In AT&T Mobility LLC v. Concepcion, the Supreme Court held that the Federal Arbitration Act preempted a California law allowing judges to invalidate class action waivers in arbitration agreements on unconscionability grounds.  The dispute in Concepcion arose out of a consumer transaction, but it is likely that the Court's reasoning and holding will be extended to other arbitration agreements, such as employment-related arbitration agreements.  You can read more about the Concepcion decision here.

On March 25, 2011, the Equal Employment Opportunity Commission (“EEOC”) published its Final Regulations implementing the ADA Amendments Act (“ADAAA”), a law signed by President George W. Bush on September 25, 2008, that was designed to overturn a number of narrow judicial interpretations of the Americans with Disabilities Act (“ADA”).  The Final Regulations become effective on May 24, 2011. The EEOC also revised its Interpretive Guidance, an appendix to the agency's ADA regulations, to include examples and explanations related to the Final Regulations.  Many of the Final Regulations come as no surprise and track the language of the ADAAA.  For example, the Final Regulations provide, as did the ADAAA, that the definition of "disability" should be construed broadly so that more employees and applicants are protected and suggest that employers should focus not on whether an individual is disabled under the ADA, but on whether a reasonable accommodation can be provided.  The most significant manner in which the Final Regulations and Interpretive Guidance attempt to accomplish this mandate is by providing further analysis of the three-pronged definition of "disability" that appeared originally in the ADA.  Some of the most important regulations enforce the concepts in the ADAAA that bodily functions are also major life activities and that mitigating measures other than standard eye glasses and contact lenses cannot be considered when determining whether someone is disabled under the ADA.   Despite comments from individual advocates and employers alike disagreeing with the approach, the Final Regulations contain a list of impairments that will "in virtually all cases" meet the definition of disability.  In issuing the Final Regulations, the EEOC also makes clear that even temporary impairments of less than 6 months in duration may be disabilities.  Also of significance to employers, in accordance with the ADAAA , the Final Regulations contain an expanded concept of an individual “regarded as” having a disability such that an employee or applicant seeking to bring a “regarded as” claim need not prove the employer believed the individual to have an impairment that substantially limits a major life activity, but merely that the employer perceived the employee as having an “impairment” and based an employment decision on that perception.

The EEOC's Final Regulations interpreting the ADAAA reinforce the expectation that under that law, employers will be far less likely to prevail at summary judgment with an argument that the employee in question was not disabled under the ADA.   For more information, please see our Legal Alert here.  In addition, we encourage you to register for our webinar on April 13 from 12:30 p.m. to 1:30 p.m. EST for an in-depth discussion of the implications of the ADAAA and its Final Regulations by clicking here.

The Fair Labor Standards Act ("FLSA") establishes the federal minimum wage rates, overtime compensation requirements, and child labor rules.  This law also prohibits employers from retaliating against employees for, among other things, filing any complaint under or related to the FLSA.  On March 22, 2011, the U.S. Supreme Court held in Kasten v. Saint-Gobain Performance Plastics Corp. that the FLSA's retaliation provision applies to employees who orally complain about improper practices under the FLSA as well as to employees who file written complaints.

 The Supreme Court's Decision in Kasten v. Saint-Gobain Performance Plastics Corp.

             In Kasten, an employee alleged that he orally complained to his immediate supervisor and to his employer's Human Resources Manager and Operations Manager that the company's timeclocks were placed in locations that prevented employees from clocking in until after they had commenced their compensable working time and required them to clock out before the end of their compensable working time, thus resulting in underpayments under the FLSA.  After the employee was discharged, he filed a lawsuit under the FLSA, claiming that the discharge was in retaliation for his complaints alleging FLSA violations.  Both the trial court and the Seventh Circuit Court of Appeals rejected the employee's claims on the grounds that the FLSA's retaliation provision does not protect employees who make oral complaints about wage-and-hour matters.

             Reviewing the Seventh Circuit's ruling, the Supreme Court held that the FLSA's retaliation provision does indeed cover oral complaints of alleged FLSA violations.  The Court first noted that the statutory language, which refers to an employee who has "filed a complaint," was not conclusive, because the word "filed" is used in many legal contexts to refer to the submission of material orally as well as in writing.  The Court observed that giving a broad interpretation to the statutory language would serve the Congressional purpose of putting the primary responsibility for identifying and reporting unlawful wage-and-hour practices on private individuals, noting that a substantial portion of the American work force was illiterate when the FLSA was enacted in the 1930s and that excluding oral complaints of FLSA violations from protection would therefore have exposed many workers to retaliation for reporting violations in the only manner in which they were capable of doing so.  The Court did not believe that Congress could have intended that result.  The Court also found instructive the interpretation of the FLSA's retaliation provision adopted by the Department of Labor, the federal agency given general enforcement authority under that law.  The Department of Labor has long taken the position that the retaliation provision protects employees who file their complaints orally as well as those who file them in writing.

             For these reasons, the Supreme Court concluded that the FLSA's retaliation provision protects employees who file complaints orally.  However, the Court recognized that not all oral remarks about wage-and-hour matters will constitute protected activity.  To fall within the scope of the FLSA's retaliation provision, the Court said, an oral complaint must be sufficiently clear and detailed for a reasonable employer to understand, in light of the complaint's content and context, that it is an assertion of FLSA rights and a call for their protection.  Importantly, the Court did not address the issue of whether a complaint filed exclusively with an employer and not with a government agency is protected under the FLSA's retaliation provision.

 Practical Implications

             Although the Supreme Court did not decide whether a purely internal complaint of an alleged FLSA violation is protected conduct, a number of lower courts have taken the position that an employee who complains only to his employer about noncompliance with the FLSA is protected from retaliation.  Consequently, employers would be wise to treat both oral complaints and written complaints about overtime, minimum wage, and child labor matters that are submitted to management, either directly or through a grievance-resolution process, as protected conduct.  Managers and supervisors should be trained to identify complaints relating to the FLSA and should be instructed not to take such complaints, whether communicated orally or in writing, into account when making employment decisions adversely affecting the employees who make those complaints. 

In a decision that will affect both unionized and nonunionized private-sector employers, the National Labor Relations Board (the "Board") has held that the National Labor Relations Act ("NLRA") prohibits employers from discharging an  employee to prevent the employee from discussing concerns about wages with other employees.  The Board's decision in Parexel International LLC, issued on January 28, 2011, marks a significant expansion of employee protections under the NLRA that private-sector employers need to consider when making certain termination decisions.  For a more detailed discussion of Parexel, please see our Legal Alert here.

On January 24, 2011, the Supreme Court broadened the scope of Title VII’s antiretaliation provisions.  In past cases, the Court addressed the antiretaliation provisions of Title VII to interpret the scope of protected employee activity and types of employer actions that may constitute unlawful retaliation.  In Thompson v. North American Stainless, LP, the court broadened the scope of claimants who can bring a retaliation claim under Title VII by holding that the victim of an adverse employment action implemented to retaliate against another employee for engaging in protected activity may, in some circumstances, bring a Title VII retaliation claim against the employer, even though the victim had not himself engaged in any activity protected by Title VII. 

In Thompson, Eric Thompson, and his fiancée, Miriam Regalado, were both employed by North American Stainless, LP (“NAS”).  Regalado filed a sex discrimination charge against NAS with the Equal Employment Opportunity Commission (“EEOC”), an act protected by Title VII.  Three weeks after learning of the charge, NAS terminated Thompson’s employment.  Thompson subsequently sued NAS under Title VII, claiming that NAS fired him in order to retaliate against Regalado for filing her charge with the EEOC.  After two lower courts ruled that Thompson had no claim under Title VII, the case came before the Supreme Court.  The Court held that because the purpose of Title VII is to protect employees from their employers’ unlawful actions and discharging Thompson was the unlawful action by which the employer retaliated against Regalado, Thompson was within the “zone of interests” sought to be protected by Title VII and could sue NAS under that law. 

Relatives and close friends of an employee who has recently engaged in protected activity under Title VII should, in particular, be considered as being in a protected category, and employers should exercise the same care in reaching employment decisions adversely affecting them that the employer would give to decisions adversely affecting employees who have engaged in protected activity.  To minimize the risks associated with retaliation claims, employers should use their best efforts to document legitimate and nonretaliatory reasons for any adverse employment action taken with respect to these employees.

For a more detailed discussion of the Court’s decision, please see our Legal Alert here.

On November 2, 2010, Georgia voters approved an amendment to the Georgia Constitution that will allow a 2009 state statute on employment-related restrictive covenants to go into effect.  The statute, which will apply to restrictive-covenant agreements entered into on or after November 3, 2010, was designed to give the drafters of restrictive-covenant provisions more flexibility and certainty in crafting those provisions and to supersede some of the more stringent court-made rules regarding restrictive covenants.  Although the validity of the new law is likely to be challenged based on the wording of the constitutional-amendment referendum that authorized it, the new statute, if upheld, will make it significantly easier for employers to enforce restrictive covenants in Georgia.

For further information about the new Georgia law on restrictive covenants, see our Legal Alert here.

The Uniformed Services Employment and Reemployment Rights Act (“USERRA”) is a federal law granting certain rights to employees who leave employment to perform military service.  These rights include the right to reemployment at the end of the military service.  For the last nine years, employers with employees who left their jobs to fulfill military obligations in support of the War Against Terror and U.S. operations in Iraq and Afghanistan were often primarily concerned with the provisions of USERRA dealing with employee rights during a military leave of absence.  Now, with increasing numbers of our troops returning from military service and reentering the civilian work force, the provisions of USERRA relating to the reemployment rights of veterans are taking on heightened significance.

As a general rule, an employee who leaves a job to perform military service is entitled to reemployment after military service is completed if four conditions are satisfied:

     (1)  The employee had given the employer notice that he or she was leaving work to perform military service.

     (2)  The employee’s total military service while employed by the employer does not exceed five years.

     (3)  The employee applies for reemployment within the time limits set by USERRA.  (If the employee is returning from military service lasting more than 180 days, the employee has 90 days to reapply.  Shorter application periods apply to shorter periods of service.)

     (4)  The employee has not been separated from the military under other-than-honorable conditions.

In determining whether the second condition listed above – the employee has not exceeded the five-year limit on total military service – has been satisfied, certain types of military service are not counted.  Among these are active duty because of a war or national emergency declared by the President or Congress.  President Bush declared a national emergency after the 9/11 attacks, so the military service of any reservist who was called to active duty or ordered to remain on active duty pursuant to the executive order declaring that national emergency will not count against the five-year limit.  In addition, military service in support of Operation Iraqi Freedom or Operation Enduring Freedom does not count against the five-year limit, regardless of where the employee was stationed.  As a result of the exceptions relating to wars and national emergencies, most military service during the last nine years will not count against the five-year limit on total military service.

If a returning veteran meeting the four conditions listed above applies for reemployment, the employer has a general duty under USERRA to reemploy that individual, unless it is unreasonable or impossible to do so.  These exceptions to the general duty are construed very narrowly.  If the employer implemented a reduction in force while the employee was in the military and the employee would have been terminated had he or she been actively working, the employer would not have to reemploy the individual.  In other situations, however, the employer will often find it difficult to establish that reemployment is unreasonable or impossible.  For example, the fact that the employer replaced the employee when he or she left for military service does not excuse the employer from reemploying the returning veteran, even if the replacement worker turned out to be a much better employee and even if the employer has to fire the replacement worker to make room for the returning veteran.

The position to which the veteran is entitled  upon return from military service is the position he or she would have attained with reasonable certainty had the veteran remained continuously employed.  This is called the escalator position.  For example, if the employee would have been promoted during the period of military service had he or she remained continuously employed, the employee would be entitled to that higher position upon reemployment, and the employer must make reasonable efforts to make the employee qualified for that higher position.  This may require special training for the employee.  If the employee cannot be made qualified for the escalator position through reasonable efforts, the employer must reemploy the individual in the nearest approximate position to the escalator position, provided the employee is qualified for that position or can be made qualified through reasonable efforts.  If no such position exists, the employee is entitled to the job he or she left.  (Slightly different rules for identifying the appropriate reemployment position apply when the employee was absent for military service lasting less than 181 days or when the employee has a service-related disability.)

In identifying the appropriate escalator position, it should be noted that the escalator can go down as well as up.  If the employee would have been demoted or would have suffered a pay cut had he or she remained continuously employed during the period of military service, the employee is entitled to reemployment in that lower ranked job or at the lower salary upon returning from military service.

If the returning veteran has a disability incurred during military service, the employer has a duty to provide reasonable accommodations for that condition, even if the employer is not covered by the Americans with Disabilities Act (“ADA”).  USERRA does not adopt the ADA’s definition of “disability,” and conditions that do not constitute a disability under the ADA may nevertheless be considered a disability requiring reasonable accommodation under USERRA.  For example, under USERRA, an employer would have to accommodate a short-term disabling condition, such as a broken leg, incurred in the course of military service. 

Upon reemployment of a returning veteran, an employer must credit the employee with the period of military service for purposes of benefits based on length of employment.  For example, if the employer’s vacation policy provides two weeks of vacation during the first five years of employment and three weeks after five years, an employee who works for one year, goes on military leave for five years, and returns to employment would be eligible for three weeks of vacation upon reemployment.  The employer also must count the period of military service as time worked for leave-eligibility purposes under the Family and Medical Leave Act.  If the employer provides health insurance to employees, a returning veteran is entitled to immediate coverage upon reemployment with no waiting period.

Once the returning veteran is reemployed, USERRA provides special protection against discharge without cause.  If the military service lasted 31 to 180 days, the employee may not be discharged without cause during the first 180 days of reemployment.  If the military service lasted more than 180 days, the employee is protected against discharge without cause for a full year after reemployment.  Cause for discharge includes not only employee misconduct, but also nondiscriminatory termination as part of an economically motivated reduction in force.  Employers should exercise caution in terminating reemployed veterans during this period of protection against discharge without cause.  If a termination is challenged, the employer will have the burden of proving it had cause to discharge the employee.  The employer should therefore make sure that it has solid evidence to back up its termination decision.

In a 5-4 decision, the Supreme Court has ruled that the National Labor Relations Board (the “Board”) acted without authority during the 27-month period in which it operated with only two members.  The Court’s ruling in New Process Steel, L.P. v. NLRB effectively invalidates nearly 600 National Labor Relations Act decisions issued by the Board from January 2008 through March 2010.  The majority opinion, authored by Justice Stevens, concluded that because the Board as a whole did not have at least three members, a quorum of the Board did not exist, and the Board could not act.  In a press release issued in response to the Supreme Court’s ruling, the Board indicated that New Process Steel and other pending cases challenging the two-member decisions, five of which are currently before the Supreme Court with another 69 pending in the federal courts of appeal, are expected to be remanded for consideration  by the current Board, consisting of Members Liebman, Schaumber, Becker,  Pearce, and Hayes.   It seems likely that membership issues may continue to plague the Board.  With Member Schaumber’s term expiring on August 27, 2010, the Board will  be left with only four members. Given that  the term of Member Liebman and the recess appointment of Member Becker  are set to expire in  2011, the Board could  again  be reduced to two unless the Senate acts to confirm additional nominees.   

For further information on the Supreme Court's ruling and its potential impact, see our Legal Alert here

Most employers are familiar with the Americans with Disabilities Act’s requirement to accommodate disabled employees.  This accommodation can take the form of a temporary or permanent reassignment to a different, vacant position.  Although the Act contemplates such a reassignment, it does not clarify whether a vacant position includes one currently occupied by a temporary worker.  In Duvall v. Georgia-Pacific Consumer Products LP, the Tenth Circuit defined a “vacant position” under the ADA to include only those positions also available to similarly situated non-disabled employees. 

 After the plaintiff’s disability rendered him unable to work around paper dust in its paper mill, Georgia-Pacific (“GP”) placed him on leave while it searched for a position he could safely perform.  Plaintiff claimed that he should have been offered one of the temporary jobs staffed by third-party temporary workers in either the mill’s shipping department or the storeroom.  GP ultimately found the plaintiff a permanent position in the mill’s storeroom, which he accepted.

 The plaintiff nevertheless filed suit against GP, claiming that while the company endeavored to find him a permanent position, he should have been awarded one of the temporary positions, displacing a temporary worker from a third-party staffing agency.  The Eastern District of Oklahoma disagreed, finding instead that GP treated the plaintiff appropriately because the plaintiff failed to identify any vacant positions denied him.  The Tenth Circuit affirmed the decision, defining vacant positions as only those available to similarly situated non-disabled employees.  Kilpatrick Stockton’s Randall D. Avram and Sabrina P. Rockoff represented GP before both courts.

Title VII generally requires an employee claiming discrimination to file a charge with the EEOC within 180 or 300 days (depending on the jurisdiction) of the occurrence of the allegedly discriminatory act.  This requirement was prominently at issue in the 2007 Lilly Ledbetter case, in which the Supreme Court ruled that an employee’s claim of pay discrimination was untimely because it was based on decisions allegedly made by her employer outside the 180-day period.  Congress effectively reversed this ruling in 2009, amending Title VII and other antidiscrimination statutes to provide that, in pay discrimination cases, the 180-day filing period “resets” with each new paycheck – even if the discriminatory pay decision occurred much earlier.  Now, the Supreme Court has unanimously held that a group of employees who failed to timely challenge an employer’s administration of an allegedly discriminatory test may still bring a timely claim based on the later application of the test’s scores to hiring decisions.

In Lewis v. City of Chicago, the City administered a written test to applicants for fire-fighter positions and selected candidates based on their scores.  In May 1996, candidates were selected randomly from the group of applicants who scored at least 89 out of 100 points.  Those scoring between 65 and 88 were deemed qualified and kept on an eligibility list, but were informed it was unlikely they would be selected.  In March 1997 an unselected African-American candidate filed an EEOC charge alleging that the test’s cut-off score negatively and unfairly impacted African-American candidates.

The Supreme Court ruled that the employee’s charge was timely filed within 180 days after the City applied the results of this test to a hiring decision.  The Court's decision turned in large part on the fact that the employee’s claim was not one of “disparate treatment,” which requires an employee to show that the employer engaged in intentional discrimination within the 180-day period.  Instead, the employee’s claim was that the cut-off score had a “disparate impact” on African-American candidates.  Because this claim did not require the showing of an intent to discriminate, but only a disparate impact within the 180-day period, the Court ruled that a claim based on the City’s later application of the test scores was timely filed.