According to DOL statements on this strategy, Plan/Prevent/Protect is aimed at those employers who have not taken the necessary steps to ensure compliance. DOL states its recognition that some employers’ lack of compliance is the result of difficulty understanding the laws and regulations that govern America’s workplaces. For other employers, DOL’s opinion is that complacency or a “catch me if you can” philosophy may be why they have not taken more proactive actions to achieve compliance.

The Labor Department seeks to change the behavior of such employers by requiring employers to “find and fix” problems, rather than waiting for a Labor Department investigator to discover the problems and enforce the law. Although the specifics will vary by law, industry and regulated enterprise, this “Plan/Prevent/Protect” strategy will require all regulated employers to take three steps to ensure safe and secure workplaces and compliance with the law:

* “PLAN”: The Department will propose a requirement that employers create a plan for identifying and remedying risks of legal violations and other risks to workers – for example, a plan to search their workplaces for safety hazards that might injure or kill workers. The employer would provide its employees with opportunities to participate in the creation of the plans. In addition, the plans would be made available to workers so they can fully understand them and help to monitor their implementation.

• “PREVENT”: The Department will propose a requirement that employers thoroughly and completely implement the plan in a manner that prevents legal violations. The plan cannot be a mere paper process. The employer cannot draft a plan and then put it on a shelf. The plan must be fully implemented for the employer to comply with the “Plan/Prevent/Protect” compliance strategy.

• “PROTECT”: The Department will propose a requirement that employers ensure that the plan’s objectives are met on a regular basis. Just any plan will not do. The plan must actually protect workers from violations of their workplace rights.

What the strategy proposes is that employers be required to assemble plans, create processes and designate people charged with achieving compliance. They will be required to implement these plans and evaluate their effectiveness in achieving compliance.

New rules will primarily target compliance with the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA), the Federal Mine Safety and Health Act of 1977 (Mine Act), the Employee Retirement Income Security Act (ERISA), and Executive Order 11246 (affirmative action for federal contractors and subcontractors).

As part of the recordkeeping requirements of the Fair Labor Standards Act, the DOL proposes to establish a requirement that employers perform a classification analysis for any worker that the employer classifies as an independent contractor. The employer would then be required to disclose that analysis to the worker and retain that analysis to give to DOL investigators who might request it.

Without a doubt, DOL’s new enforcement program will compel employers to institute more proactive policies and actions to attempt to ensure their compliance with Federal employment laws. The first step is for employers to “find and fix’ violations – that is, assure compliance – before a Labor Department investigator arrives at the workplace. The audit can then be used as the basis for writing and implementing a compliance plan to prevent future violations. The plan must contain implementation steps such as annual compliance audits, methods for employees to participate in the plan, and designation of particular employees who are responsible for ensuring compliance. Ongoing education and training for these designated employees will also be a necessity, as well as a system for compliance reporting.

Employers who fail to take the steps necessary to comprehensively address the risks, hazards, and inequities in their workplaces will be considered out of compliance by DOL and, depending upon the agency and the substantive law it is enforcing, subject to remedial action. In other words, “Tag, You’re It” for developing, implementing and enforcing company policies that will ensure your company’s compliance with employment, safety and employee benefit laws.

Jerome Pinn is an attorney in the Knoxville office of Wimberly, Lawson Seale & Daves.  He welcomes your comments on this topic or other employment law issues, and can be reached at (865)546-1000.

The EEOC does not keep a record of the sex of the alleged harassers, but it is apparent that an increasing number of sex harassment claims filed by men are male-on-male cases. Those cases range from clear-cut unwelcome sexual advances to locker-room type behavior, including vulgarity and horseplay with sexual connotation. Often, there is bullying and sexual groping alleged.

Some experts believe that the extent of the presence of such sexual harassment is not fully represented by the number of claims filed. That under-reporting may be due to the stigma associated with men being victims of other men. In addition to the potential humiliation, men may actually fear physical retaliation in some cases if they report or refuse to allow the unwelcome conduct.

Men who feel that they are victims of sexual harassment may tend to view their situation as a no-win dilemma. They could appear to be unmanly if they are claiming harassment by a male and if they are being harassed by a female, they may be viewed as weak if they cannot take care of it themselves. That can cause them to be reluctant to report what is occurring in their workplaces. Men also may, perhaps correctly, fear that a jury will not be as sympathetic toward them as it would be toward a similarly-situated female victim.

There may be some correlation between sexual harassment claims filed by men and the economic recession. The recession has resulted in almost twice as many men losing their jobs as women according to the U.S. Bureau of Labor Statistics. A statistical link can also be seen between the increase in jobs lost in some states and in the increase in charges filed in those states. Whereas in the past, when jobs were more available, men (and women) may be chosen to simply change jobs rather than file a sexual harassment complaint. When jobs are more scarce, they may choose to endure the harassment or to file a complaint.

Employers should continue to be certain that their anti-harassment policies are in keeping with the latest court decisions and EEOC positions. It is also advisable to conduct periodic training and education sessions for supervisor and employees. Focus should be placed on all types of illegal harassment, including religion, national origin, disability, race and age.

EEOC proposes regulations on “reasonable factors other than age” defense

The EEOC has proposed regulations defining the “reasonable factors other than age” defense to be consistent with recent U.S. Supreme Court decisions in the area. The proposed rule explains that “a reasonable factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” It is one that would be used in a like manner by a prudent employer mindful of its responsibilities under the ADEA. A “prudent” employer “knows or should know that the ADEA was designed in part to avoid the application of neutral employment standards that disproportionately affect” employment opportunities for older persons. “Accordingly, a reasonable factor is one that an employer using reasonable care to avoid limiting the employment opportunities of older persons would use.”

The proposed rule provides that an employer asserting the “reasonable factor other than age” (RFOA) defense must show its challenged employment practice was “reasonably designed to further or achieve a legitimate business purpose and was reasonably administered to achieve that purpose.” The EEOC proposal includes a non-exhaustive list of relevant considerations in deciding whether an employment practice is “reasonable” within the meaning of the defense. These considerations include whether the employment practice and its implementation are “common business practices”; the extent to which the factor is related to the employer’s stated business goal; whether the employer took steps to define the factor accurately and apply the factor fairly; whether the employer assessed the adverse impact of its practices on older workers; the severity of harm to older individuals; and whether the employer had other options available and why it selected the option it did.

The EEOC gives some examples of how its criteria would work, such as where an employer is downsizing for business reasons. Employers are cautioned against giving unfettered discretion to low level supervisors to decide who has such aptitude or skills, such as the ability to learn new computer skills, where such aptitude or skills might rely on age stereotypes. Employers must be particularly careful to avoid giving such discretion to rate employees on criteria known to be susceptible to age-based stereotyping, such as flexibility, willingness to learn, or technological skills. Employers are urged to use evaluation criteria “as objectified to the extent feasible.”

The EEOC in its proposal contrasts certain more stringent requirements under Title VII, as opposed to the ADEA. Under the ADEA, those asserting the RFOA defense need not prove “business necessity” to an adverse impact claim. However, under Title VII, where an employment criterion adversely impacts a protected group, an employer must show that the employment practice causing the disparate impact based on things such as race or sex was necessary and that there existed no less discriminatory alternatives. In contrast, in an age discrimination case, an employer need only show that its use of a factor causing adverse impact is “reasonable,” and the employer need not choose the option with the least discriminatory impact.

The EEOC has proposed regulations defining the “reasonable factors other than age” defense to be consistent with recent U.S. Supreme Court decisions in the area. The proposed rule explains that “a reasonable factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances.” It is one that would be used in a like manner by a prudent employer mindful of its responsibilities under the ADEA. A “prudent” employer “knows or should know that the ADEA was designed in part to avoid the application of neutral employment standards that disproportionately affect” employment opportunities for older persons. “Accordingly, a reasonable factor is one that an employer using reasonable care to avoid limiting the employment opportunities of older persons would use.”

The proposed rule provides that an employer asserting the “reasonable factor other than age” (RFOA) defense must show its challenged employment practice was “reasonably designed to further or achieve a legitimate business purpose and was reasonably administered to achieve that purpose.” The EEOC proposal includes a non-exhaustive list of relevant considerations in deciding whether an employment practice is “reasonable” within the meaning of the defense. These considerations include whether the employment practice and its implementation are “common business practices”; the extent to which the factor is related to the employer’s stated business goal; whether the employer took steps to define the factor accurately and apply the factor fairly; whether the employer assessed the adverse impact of its practices on older workers; the severity of harm to older individuals; and whether the employer had other options available and why it selected the option it did.

The EEOC gives some examples of how its criteria would work, such as where an employer is downsizing for business reasons. Employers are cautioned against giving unfettered discretion to low level supervisors to decide who has such aptitude or skills, such as the ability to learn new computer skills, where such aptitude or skills might rely on age stereotypes. Employers must be particularly careful to avoid giving such discretion to rate employees on criteria known to be susceptible to age-based stereotyping, such as flexibility, willingness to learn, or technological skills. Employers are urged to use evaluation criteria “as objectified to the extent feasible.”

The EEOC in its proposal contrasts certain more stringent requirements under Title VII, as opposed to the ADEA. Under the ADEA, those asserting the RFOA defense need not prove “business necessity” to an adverse impact claim. However, under Title VII, where an employment criterion adversely impacts a protected group, an employer must show that the employment practice causing the disparate impact based on things such as race or sex was necessary and that there existed no less discriminatory alternatives. In contrast, in an age discrimination case, an employer need only show that its use of a factor causing adverse impact is “reasonable,” and the employer need not choose the option with the least discriminatory impact.

Jerome Pinn is an attorney in the Knoxville office of Wimberly, Lawson Seale & Daves.  He welcomes your comments on this topic or other employment law issues, and can be reached at (865)546-1000.

An employer must pay an exempt employee the full predetermined salary for any week during which the employee performs any work, regardless of the number of days or hours worked. However, the Wage-Hour law does not require that the salary be paid if the employee does not work for an entire work week.

An employer is allowed to make prospective reductions in pay for a salaried exempt employee due to an economic downturn, provided the purpose of the reduction is to meet long-term business needs. Short-term, day-to-day or week-to-week deductions from a fixed salary based on operating requirements of the business are not permissible, and would result in the loss of the wage-hour exemption.

Wellness programs and employee health risk assessment

Published reports indicate there are a number of employers that “swear by” employee wellness programs. For example, officials at Con-Way Freight report getting back about $1.6 for each $1 that it is invested in such programs. Con-Way has reportedly seen a drop of about 20 percent in workers’ compensation costs at terminals that have had at least one wellness coach on site overseeing the program for at least a year. In addition, such terminals have fewer absences and higher productivity among other benefits.

Employees at Con-Way are made aware their wellness coach will be onsite at scheduled times and will make an effort to start general health-related dialogues with employees. Con-Way also offers drivers telephone or Web-based communications sessions with coaches. Programs began with an initial health assessment.

Perhaps because more employers are using health assessments, on Aug. 10, 2009, the Equal Employment Opportunity Commission (EEOC) issued an opinion letter on the subject. The opinion concludes that an employer’s “requirement” that all employees complete a health risk assessment to participate in an employer-funded health reimbursement arrangement, likely violates the Americans with Disabilities Act (ADA). The opinion states that employers may ask only disability-related questions and require employees to undergo medical examinations if job-related and consistent with business necessity. These actions are also permitted where they are a follow-up to an employee’s request for a reasonable accommodation, in specific medical circumstances such as periodic medical examinations for positions affecting public safety, or if part of a “voluntary” wellness program. Further, other circumstances may arise involving a particular employee who cannot perform his or her job, to determine whether he or she will face a direct threat because of a medical condition.

The health assessment addressed in the opinion letter required employees to answer over 100 questions in various categories, such as family health history, self care, personal health, women’s health, older adult health, nutrition choices, physical activity and alcohol and tobacco use. The opinion letter states:

Although the Commission has not yet taken a formal position on the question you have asked, requiring employees to complete a health risk assessment that includes many disability-related inquires — such as questions about how often they feel depressed; whether they ever have been told that they have certain conditions, such as asthma, cancer, heart disease, or diabetes; how many different prescription medications they currently take; or how much alcohol they consume — as a prerequisite to obtaining reimbursement for health expenses does not appear to be job-related and consistent with business necessity.

The letter goes on to state that many questions in the assessment are not disability-related and may be asked of employees. These include questions such as whether the employee sees a personal physician for routine care or has a health care directive, how many servings of fruit and vegetables the employee eats, whether the employee takes vitamin supplements, whether the employee eats breakfast, and how much the employee exercises. Such questions “are not likely to elicit information about a disability and, therefore, are not subject to the ADA’s restrictions.”

Lastly, the letter addresses the issue about the health risk assessment being part of a wellness program.

“Finally, even if the health risk assessment could be considered part of a wellness program, it is not voluntary because it penalizes any employee who does not complete the questionnaire by making him or her ineligible to receive reimbursement for health expenses.”

Jerome Pinn is an attorney in the Knoxville office of Wimberly, Lawson Seale & Daves.  He welcomes your comments on this topic or other employment law issues, and can be reached at (865)546-1000.

On Aug. 28, 2009, the Equal Employment Opportunity Commission (EEOC) announced that it filed a major class action lawsuit against United Parcel Service (UPS). The suit alleges that UPS terminated the employment of the plaintiff because of her disability rather than accommodating her by extending her leave of absence in violation of the American With Disabilities Act (ADA), and the lawsuit further claims that UPS discriminated against a class of individuals with disabilities by maintaining an inflexible 12-month leave policy which did not provide for a reasonable accommodation and which instead provided for termination of employment, also in violation of the ADA. The EEOC seeks an order requiring UPS to grant full relief to a class of disabled individuals by providing them with appropriate back pay with pre-judgment interest, compensation for past and future monetary losses resulting from their unlawful termination, compensation for non-pecuniary losses including but not limited to pain and suffering, and punitive damages.

According to a press release issued by the EEOC, the plaintiff administrative assistant took a 12-month leave of absence from work when she began experiencing symptoms of what was later diagnosed as Multiple Sclerosis. She returned to work for a few weeks, but soon thereafter needed additional time off after experiencing what she believed to be negative side effects of her medication. The press release further claims that although the plaintiff allegedly could have returned to work after an additional two-week of absence, UPS fired her for exceeding its 12-month policy.

UPS in its public statement expressed frustration with the government’s attack on “one of the most generous and flexible leave policies in corporate America.” UPS stated that it intends to “vigorously defend” its leave policy as the litigation progresses.

In another lawsuit, brought in September 2009, the EEOC announced a $6.2 million settlement of a class action that accused the Sears department store chain of widespread disability discrimination. The EEOC noted that the $6.2 million settlement is the largest recovery in a single lawsuit filed by the agency over alleged violations of the ADA. According to the lawsuit, Sears maintained an inflexible one-year workers’ compensation leave exhaustion policy and fired employees instead of providing them with reasonable accommodations for the disabilities as required under the ADA.

In a third related case, involving slightly different issues under the ADA, a divided Ninth Circuit Court of Appeals has reinstated the disability discrimination claims of a former employee who sued her employer for requiring that she pass a physical capacity evaluation (PCE) before returning to her job after medical leave. The employer’s policy required employees to undergo PCE’s before returning to work from medical leave, and the employer sent the employee to an occupational therapist for the exam. The PCE, which lasted 2 days, included, as the employee described it, “testing, poking, palpating and examining.” The employer ultimately told the employee that she could not have her old job and no other jobs were available for someone with her qualifications. Ultimately she was fired under a provision in the collective bargaining agreement that allowed the company to terminate employees who have been on leave for two years.

The 2-1 Ninth Circuit majority ruling agreed with the employee’s argument that the PCE was an improper medical examination under the ADA, which prohibits employee medical examinations that are not job-related and “consistent with business necessity.”

The majority concluded that the employer’s PCE went way beyond what was necessary to determine an employee’s ability to perform the essential functions of her job. Although the purpose of the PCE may have been to determine whether the employee was capable of returning to work, “the substance of the test clearly sought information about the employee’s physical and mental impairments or health, and involved tests and inquiries capable of revealing to the employer whether she suffered from a disability.”

The bottom line of much of this litigation is that the EEOC insists that in some circumstances an exception may have to be made to an objective leave of absence policy as a reasonable accommodation. However, the current state of the law suggests that an employer is not required to make exceptions to their normal leave policies, unless the employee requests an accommodation. Employers are advised to stay abreast of court decisions in this area, a good number of which should be expected over the next several years, given the recently-filed lawsuits challenging employers’ leave of absence policies.

Jerome Pinn is an attorney in the Knoxville office of Wimberly, Lawson Seale & Daves.  He welcomes your comments on this topic or other employment law issues, and can be reached at (865)546-1000.

1. E-Verify

E-Verify, which had been scheduled to expire on Sept. 30, 2009, continues to be funded by Congress on a month-to-month basis. There seems to be a growing consensus in Congress to extend E-Verify in its current form for three years. As of this writing, no long-term resolution pertaining to the funding of E-Verify has been passed, as Congress continues to debate various immigration issues.

Beginning Sept. 8, 2009, certain federal contractors and subcontractors were required to use E-Verify to confirm the work authorization of all new hires and existing employees who are assigned to work on federal contracts. In general, E-Verify applies to all federal prime contractors regardless of their size holding a contract to be performed in the U. S. with a period of performance longer than 120 days and a value over $100,000. The obligation also extends to subcontractors with service or construction subcontracts valued over $3,000. Supply and service contracts not subject to the E-Verify requirement include those for commercially available off the shelf items, such as food and agricultural products.

2. Rescission of “No-Match” Regulation

On Oct. 7, 2009, the Department of Homeland Security (DHS) formally rescinded the proposed federal “no-match” regulation. The rescission leaves employers with no direct federal guidance on how to handle their receipt of Social Security “no-match” letters or related letters pertaining to individual employees, such as “Request for Employer Information” letters or “Request for Employee Information” letters.

DHS, in its reply to the public comments on the proposed regulation, stated that: “Receipt of a no-match letter, when considered with other probative evidence, is a factor that may be considered in the totality of the circumstances and may in certain situations support a finding of ‘constructive knowledge.’ A reasonable employer would be prudent, upon receipt of a no-match letter, to check their own records for errors, inform the employee of the no-match letter, and ask the employee to review the information. Employers would also be prudent to allow employees a reasonable period of time to resolve the no-match with SSA.”

In response to a public comment that some employers are wrongly implementing the 2007 and 2008 final rules, even though these rules have now been rescinded, and that employees who receive no-match letters are being discriminated against, DHS stated that: “Employers should not use no-match letters, without more, as a basis for firing employees without resolution of the mis-match, and DHS has never countenanced such a practice.”

DHS also stated that: “Employers remain liable where the totality of the circumstances establishes constructive knowledge that the employer knowingly hired or continued to employ unauthorized workers. An employer’s receipt of a no-match letter and the nature of the employer’s response to the letter are only two factors that may be considered in determining the totality of the circumstances.”

3. ICE I-9 Audits

On July 1st, 2009, Immigration and Customs Enforcement (ICE) issued 652 Notice of Inspection (NOIs) letters to companies nationwide — which is more than ICE issued throughout all of last fiscal year when it only sent out 503 similar notices. The notices alerted businesses that ICE wanted to inspect their employment records to determine whether or not they were complying with employment eligibility verification laws and regulations. Those chosen for the audits were not randomly selected, but were based on ICE suspicions of supposed compliance issues.  The I-9 forms for current and former employees were requested, along with payroll lists, Social Security letters and responses and related items. Some of these employers began getting written responses from the ICE audits a couple of months later, in many cases outlining what steps the employer should take in correcting or re-accomplishing their I-9 forms, and in some cases requiring the employers to take investigatory steps to review the legal status of certain named employees.  This type of process is expected to be a prime ICE enforcement method for the future, and ICE has suggested that criminal penalties and civil fines are going to be a large part of its strategy going forward. Although ICE does not directly state it will no longer conduct workplace raids, it does state that workplace raids will not be a point of emphasis in the future.

4. Failure to include “No Rehire” provisions in settlement agreement can be costly

Usually, when an employer settles a case, it believes that its problems with the plaintiff are over and done with. The employer in the recent case of Docken v. State of Minnesota learned otherwise. The employee quit her job after the employer refused to approve FMLA leave for her to go to Mexico to help her ill father. She then sued the employer, alleging she had been denied the right to FMLA leave to care for a parent with a serious health condition. The employer apparently realized its mistake and settled the case with the employee. Later, the former employee reapplied, but was not hired. She sued for retaliation, alleging that she had been blackballed because she had sued the employer previously. The court stated that turning down the former employee’s application could constitute retaliation because the prior settlement had no provision that the employee would not reapply for future employment.

It is typically lawful in a settlement agreement for an employer to request a provision that the employee will not apply in the future. Employers who do not include such provisions open themselves up to claims like that in the current case. Employers should be aware that in a workers’ compensation settlement, the issue can be somewhat more difficult, because some workers’ compensation systems do not allow settlement provisions unrelated to the workers’ compensation claim. However, employers can manage that issue by using two settlement agreements signed at the same time.