DONNING AND DOFFING OF UNIFORMS: COMPENSABLE OR NOT?
The number of lawsuits filed by employees seeking overtime pay, pursuant to the Fair Labor Standards Act (FLSA), for pre and post shift time is continuing to grow, including those cases initiated by peace officers. A variety of peace officer groups who are required to wear uniforms or special protective or safety gear have lawsuits pending because public employers do not provide compensation for time spent putting on (donning) or taking off (doffing) such gear prior to or at the end of work shifts. To date, six district courts have addressed the issue of compensability for donning and doffing of police uniforms in extensive written opinions, with no clear consensus on the issue.
In the case of Martin v. City of Richmond, the district court granted the City's motion for summary judgment regarding the donning and doffing of uniforms, finding such time was not compensable under the FLSA. The Martin court found, however, time spent donning and doffing protective gear, "integral and indispensable" to the work performed, may be compensable under the FLSA, depending of whether such tasks were performed at work or at home, and depending on how much time was incurred.
In the case of Abbe v. City of San Diego, the district court sided completely with the employer, ruling the donning and doffing of both the uniform and protective gear was not compensable because neither the law, the employer's policies, nor the nature of the work required the donning and doffing to be done at work, and if done at home, it was not compensable under the FLSA.
In the case of Vucinich, Maciel v. City of Los Angeles, the district court agreed with the Martin court and ruled that while donning and doffing of uniforms was not compensable, donning and doffing of protective gear was integral and indispensable to the officers' work and was therefore compensable under the FLSA. Unlike the Martin and Abbe courts, the Vucinich, Maciel court did not engage in any analysis of donning and doffing protective gear at home versus at work in finding such time compensable. Following the summary judgment ruling in 2007, this case became Maciel v. City of LosAngeles and went to a bench trial, resulting in a verdict which upheld the summary judgment ruling time spent donning and doffing protective gear was compensable under the FLSA.
In the case of Lemmon v. City of San Leandro, the district court disagreed with the Martin, Abbe, and Vucinich/Maciel cases, and ruled entirely for the peace officers, holding that donning and doffing of both the uniform and special protective gear was compensable under the FLSA. The Lemmon court stated "there is no distinction between the uniform and the equipment because the police uniform, with all of its component parts, functions as an integrated whole that serves as the officer's survival suit." In addition, in direct opposition to the Martin and Abbe decisions, the Lemmon court ruled the compensability of time spent donning and doffing of the uniform and special protective gear did not depend on whether such activity occurred at the employer's premises.
In the matter of Dager v. City of Phoenix, the district court ruled the City did not have an obligation to pay its police officers for the time spent donning and doffing their police uniforms and gear because only those employees actually required to change at work could claim the time spent donning and doffing was compensable, and the uniform itself was not "necessary" to the performance of police work. Finally, in the matter of Bamonte v. City of Mesa, the district trial court granted summary judgment in favor of the City on the officer's donning and offing claims.
The Abbe, Lemmon, and Bamonte summary judgment rulings and the Maciel bench trial decision are now on appeal to the Ninth Circuit Court of Appeal. When the Ninth Circuit decision is published, the application of the FLSA to pre and post shift donning and doffing time will likely become much clearer for California peace officers. Until then, the contrary district court decisions leave public employers unsettled.
Although these cases arise in the context of police departments, they certainly have the potential for far wider reach. If any federal appellate court holds time spent changing in and out of a uniform can be compensable regardless of where it takes place, employers that require employees to wear a uniform on the job can expect a significant number of similar claims to be made by employees in a variety of industries.
Thursday, April 02, 2009
AB 1825 SEXUAL HARASSMENT PREVENTION TRAINING
California Assembly Bill 1825 became law January 1, 2005, and required California employers with 50 or more employees to provide two hours of sexual harassment prevention training to supervisory-level employees every two years. The final regulations, which became effective August 17, 2007, include very specific guidelines regarding course content, training method, and trainer qualifications. (FEHC final regulations.) Employers should proceed with compliance training cautiously, no longer resting on the protection of an interim "good faith effort" provision. While many employers anticipated or hoped for an official waiver of training due to the present state of the economy, no such pardon arrived. Consequently, 2009 is anticipated to be another significant compliance period.
To help employers meet their training requirements during these difficult financial times, Basham Parker LLP has developed a variety of training solutions designed to provide quality training at reasonable costs, including reduced-fee attorney training, qualified non-attorney training, web-based training through a no-commission relationship with Workplace Answers, Inc., and scheduled webinars. For more information regarding these training options, please contact our Client Services Department.
To help employers meet their training requirements during these difficult financial times, Basham Parker LLP has developed a variety of training solutions designed to provide quality training at reasonable costs, including reduced-fee attorney training, qualified non-attorney training, web-based training through a no-commission relationship with Workplace Answers, Inc., and scheduled webinars. For more information regarding these training options, please contact our Client Services Department.
COBRA NOTICES
As Basham Parker LLP reported in its March 2009 newsletter, the U.S. Department of Labor has issued preliminary direction on how the COBRA subsidy, recently passed by Congress as part of the economic stimulus package (the American Recovery and Reinvestment Act of 2009 [ARRA]), should be handled by employers. ARRA mandates that plans notify certain current and former participants and beneficiaries about the premium reduction. The Department has created model notices to help employers and plan administrators comply with these requirements. The model notices may be downloaded in modifiable format.
SAN FRANCISCO HEALTH CARE PROGRAM STILL BREATHING
On March 31, 2009, the U.S. Supreme Court refused yet another emergency motion to stop San Francisco's controversial program requiring employers to spend specified funding on employees' health care - the second refusal in the continuing battle between the city and the Golden Gate Restaurant Association. The ordinance has been in effect since January 2008, when the U.S. Court of Appeals for the Ninth Circuit issued a stay of judgment allowing San Francisco to extend health coverage to its uninsured residents by freezing a district court's earlier ruling that the landmark employer-funded health care program was preempted by the Employee Retirement Income Security Act (ERISA).
The Association plans to file a petition for certiorari review, and remains optimistic the Supreme Court will eventually agree to hear the merits of their dispute. The Association requested the stay in order to both "spare our membership what we consider to be the illegal cost of the mandate" during the possible 15 months before the Supreme Court would actually rule on the case - if it elects to hear the matter, and to avoid "inconsistent legal decisions" that could encourage other municipalities to pass similar legislation. The city of San Mateo, California, has created a task force to consider the program, and similar legislation has been introduced in New Jersey and Connecticut.
The Association plans to file a petition for certiorari review, and remains optimistic the Supreme Court will eventually agree to hear the merits of their dispute. The Association requested the stay in order to both "spare our membership what we consider to be the illegal cost of the mandate" during the possible 15 months before the Supreme Court would actually rule on the case - if it elects to hear the matter, and to avoid "inconsistent legal decisions" that could encourage other municipalities to pass similar legislation. The city of San Mateo, California, has created a task force to consider the program, and similar legislation has been introduced in New Jersey and Connecticut.
MUST A PLAINTIFF PRESENT DIRECT EVIDENCE OF DISCRIMINATION IN ORDER TO OBTAIN A MIXED-MOTIVE INSTRUCTION IN A NON-TITLE VII DISCRIMINATION CASE?
Potentially one of the most significant pending employment law matters in recent history reached the U.S. Supreme Court for oral argument on March 31, 2009: Gross v. FBL Financial Services, Inc., where the Court considered the issue of burden of proof in "mixed motive" cases under the Age Discrimination in Employment Act (ADEA). The High Court granted certiorari on the question, "must a plaintiff present direct evidence of discrimination in order to obtain a mixed-motive instruction in a non-Title VII discrimination case?" One of the most noteworthy issues to have arisen during the briefing in this case, is whether the Court should limit itself to that question or decide, instead, a much broader question of much greater importance - namely, whether to overrule its decision in Price Waterhouse v. Hopkins, and hold instead that the plaintiff must always bear the burden of proof in mixed motive cases.
Petitioner Jack Gross sued his employer for age discrimination in violation of the ADEA, alleging he was demoted because of his age. The employer both denied that age was a factor in its decision-making and further argued that even if it had been, it also had a legitimate reason for demoting Gross. The question then arises: if the employer would have taken the same action anyway, regardless of its discriminatory motive, should it be held liable for intentional discrimination because it also had an illegal motive? And if not, who should bear the burden of proving what the employer would have done absent the discriminatory motive?
The Supreme Court set the rules for such "mixed motive" cases under Title VII in Price Waterhouse. It held that the answer to the first question is "no" - the employer is not liable if it would have taken the same action anyway, despite the discriminatory motive. A majority of the Justices further agreed (albeit in fractured opinions) that upon an appropriate showing by the plaintiff, the burden should shift to the defendant to prove that it would have taken the same action anyway. Congress overruled Price Waterhouse to the extent it held that an employer who makes the required showing is not liable at all for the discrimination. Instead, the 1991 Civil Rights Act Amendments provide that the employer is liable, but is subject to reduced employee remedies. However, Congress did not apply this new provision to the ADEA.
In this case, the district court instructed the jury that if the plaintiff proved by a preponderance of the evidence, direct or otherwise, that age was a motivating factor in the decision to demote him, then the burden of persuasion shifted to the defendant to prove it would have taken the same action absent the prohibited consideration of age.
On appeal, the Eighth Circuit reversed, holding that the burden of persuasion should shift to the defendant only if the plaintiff proved that age was a motivating factor by presenting direct evidence of age bias. When the plaintiff relies on circumstantial evidence, the court held, the burden of proof remains on the plaintiff, who must demonstrate that the employer would not have demoted him but for his age. Gross petitioned for certiorari, asking the Court to decide whether the burden of proof in mixed motive cases shifts to the employer only when direct evidence of bias is presented, or whether it shifts in all cases, regardless of the type of evidence. Respondents' brief in opposition focused on disputing that there was a circuit split on the question, or whether this case was an appropriate vehicle to resolve the asserted split. The Court eventually granted certiorari.
A copy of the oral argument transcript is available for download and viewing. A decision is expected before the Supreme Court completes its term this year. This case is worth watching closely, particularly for employers who often find themselves in Federal Court.
Petitioner Jack Gross sued his employer for age discrimination in violation of the ADEA, alleging he was demoted because of his age. The employer both denied that age was a factor in its decision-making and further argued that even if it had been, it also had a legitimate reason for demoting Gross. The question then arises: if the employer would have taken the same action anyway, regardless of its discriminatory motive, should it be held liable for intentional discrimination because it also had an illegal motive? And if not, who should bear the burden of proving what the employer would have done absent the discriminatory motive?
The Supreme Court set the rules for such "mixed motive" cases under Title VII in Price Waterhouse. It held that the answer to the first question is "no" - the employer is not liable if it would have taken the same action anyway, despite the discriminatory motive. A majority of the Justices further agreed (albeit in fractured opinions) that upon an appropriate showing by the plaintiff, the burden should shift to the defendant to prove that it would have taken the same action anyway. Congress overruled Price Waterhouse to the extent it held that an employer who makes the required showing is not liable at all for the discrimination. Instead, the 1991 Civil Rights Act Amendments provide that the employer is liable, but is subject to reduced employee remedies. However, Congress did not apply this new provision to the ADEA.
In this case, the district court instructed the jury that if the plaintiff proved by a preponderance of the evidence, direct or otherwise, that age was a motivating factor in the decision to demote him, then the burden of persuasion shifted to the defendant to prove it would have taken the same action absent the prohibited consideration of age.
On appeal, the Eighth Circuit reversed, holding that the burden of persuasion should shift to the defendant only if the plaintiff proved that age was a motivating factor by presenting direct evidence of age bias. When the plaintiff relies on circumstantial evidence, the court held, the burden of proof remains on the plaintiff, who must demonstrate that the employer would not have demoted him but for his age. Gross petitioned for certiorari, asking the Court to decide whether the burden of proof in mixed motive cases shifts to the employer only when direct evidence of bias is presented, or whether it shifts in all cases, regardless of the type of evidence. Respondents' brief in opposition focused on disputing that there was a circuit split on the question, or whether this case was an appropriate vehicle to resolve the asserted split. The Court eventually granted certiorari.
A copy of the oral argument transcript is available for download and viewing. A decision is expected before the Supreme Court completes its term this year. This case is worth watching closely, particularly for employers who often find themselves in Federal Court.
PARTICIPANTS IN A TIP POOL NEED NOT BE RESTRICTED TO STAFF WHO PROVIDED DIRECT TABLE SERVICE TO PATRONS
On March 27, 2009, the Second Appellate District, California Court of Appeal, affirmed a ruling in favor of Reins International California Inc., holding participants in tip pooling need not be restricted to staff who provide direct table service to patrons.
The Los Angeles County Superior Court case was filed in 2007 by waiter Brad Etheridge on behalf of a class of similar Reins' servers. Etheridge alleged the restaurant's tip-pooling practice violated the California Labor Code and constituted an unfair business practice because it requiresd waiters to give a portion of guest tips to bartenders, dishwashers, and other kitchen staff, who provide no direct table service to customers. Reins, which operates several restaurants in California, won dismissal of the suit after arguing to the trial court that state law did not limit tip sharing to workers who provide direct table service and that a tip pool could include any number of employees, so long as the tips are not shared with management. Etheridge appealed, arguing the appellate court's 1990 Leighton v. Old Heidelberg Ltd. ruling foreclosed a tip pool that included employees not providing "direct table service."
The appeals court majority found Etheridge's reading of Leighton as "too narrow," holding, "[t]he Leighton court concluded that a mandatory tip pool is supported by 'common sense and fairness and protects the public, the employees, and the restaurant employer.' These policy reasons extend to mandatory tip pools which include employees who do not provide direct table service, but participate in the chain of service."
The court's opinion was not unanimous, with one dissenting judge holding that any employer-mandated tip-sharing policy directly violated California's labor laws, finding, "[b]ecause Section 351 (of the Labor Code) guarantees that the gratuity is the 'sole' property of the employee or employees for whom it was left, Section 351 clearly prohibits the employer from appropriating any portion of the server's gratuity and diverting it to other employees." Judge P.J. Klein said he could not agree with the majority in their decision, stating that, "[t]he instant majority's extension of Leighton to include in the tip pool any employees who 'contribute to a patron's service' or who 'participate in the chain of service' is unwarranted and simply compounds the error made by the Leighton majority in the first instance," and added that the state's Supreme Court should weigh in on the matter and clarify the issue.
The Los Angeles County Superior Court case was filed in 2007 by waiter Brad Etheridge on behalf of a class of similar Reins' servers. Etheridge alleged the restaurant's tip-pooling practice violated the California Labor Code and constituted an unfair business practice because it requiresd waiters to give a portion of guest tips to bartenders, dishwashers, and other kitchen staff, who provide no direct table service to customers. Reins, which operates several restaurants in California, won dismissal of the suit after arguing to the trial court that state law did not limit tip sharing to workers who provide direct table service and that a tip pool could include any number of employees, so long as the tips are not shared with management. Etheridge appealed, arguing the appellate court's 1990 Leighton v. Old Heidelberg Ltd. ruling foreclosed a tip pool that included employees not providing "direct table service."
The appeals court majority found Etheridge's reading of Leighton as "too narrow," holding, "[t]he Leighton court concluded that a mandatory tip pool is supported by 'common sense and fairness and protects the public, the employees, and the restaurant employer.' These policy reasons extend to mandatory tip pools which include employees who do not provide direct table service, but participate in the chain of service."
The court's opinion was not unanimous, with one dissenting judge holding that any employer-mandated tip-sharing policy directly violated California's labor laws, finding, "[b]ecause Section 351 (of the Labor Code) guarantees that the gratuity is the 'sole' property of the employee or employees for whom it was left, Section 351 clearly prohibits the employer from appropriating any portion of the server's gratuity and diverting it to other employees." Judge P.J. Klein said he could not agree with the majority in their decision, stating that, "[t]he instant majority's extension of Leighton to include in the tip pool any employees who 'contribute to a patron's service' or who 'participate in the chain of service' is unwarranted and simply compounds the error made by the Leighton majority in the first instance," and added that the state's Supreme Court should weigh in on the matter and clarify the issue.
SCORE ONE FOR EMPLOYERS: ARBITRATION OF ADEA CLAIMS ENFORCEABLE UNDER COLLECTIVE BARGAINING AGREEMENTS
The Supreme Court has upheld the enforceability of arbitration provisions in collective bargaining agreements which require employees to arbitrate claims under federal antidiscrimination laws. The ruling in 14 Penn Plaza v. Pyett is welcome news to employers, as mandatory arbitration of employment discrimination claims will help lessen the risk of outrageous plaintiffs' verdicts so frequently associated with trial before a jury.
Petitioner 14 Penn Plaza LLC owns and operates the New York City office building where Respondents worked as night lobby watchmen and other similar capacities pursuant to a collective bargaining agreement (CAB) which provided that all claims made under Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) were subject to binding arbitration. After 14 Penn Plaza, with the Union's consent, engaged licensed security guards for the building, Respondents were reassigned to jobs as porters and cleaners. Arguing the reassignments led to a loss in income, other damages, and were otherwise less desirable than their former positions, Respondents asked their Union to file grievances alleging, among other things, that 14 Penn Plaza violated the CBA's ban on workplace discrimination by reassigning Respondents on the basis of their age in violation of Age Discrimination in Employment Act of 1967. The Union requested arbitration under the CBA, but withdrew the age-discrimination claims on the ground that its consent to the new security contract precluded it from objecting to Respondents' reassignments as discriminatory. Following a four-day hearing, the arbitrator denied all of the remaining claims.
The employees then filed a lawsuit in federal district court alleging that their reassignment violated the ADEA. Believing the issue had already been resolved by arbitration, 14 Penn Plaza asked the court to dismiss the lawsuit or, in the alternative, to refer the case back to arbitration to resolve the federal claims of age discrimination. The court did neither, but rather held the CBA arbitration provision violated Respondents' rights to pursue their claims in a federal courtroom. On appeal, the U.S. Court of Appeals for the Second Circuit agreed, holding, "[a] union negotiated mandatory arbitration agreement purporting to waive a covered worker's right to a federal forum with respect to statutory rights is unenforceable."
Existing precedent includes a 1974 case, Alexander v. Gardner-Denver, where the Supreme Court held that union-negotiated arbitration agreements regarding federal rights are unenforceable. Thereafter, in Gilmer v. Interstate/Johnson Lane, the court held that individual arbitration agreements are enforceable as long as their terms are "clear and unmistakable." The Supreme Court's uncertainty on this issue has caused a great deal of confusion among lower courts.
On April 1, 2009, in a 5-4 decision, the Supreme Court reversed the Second Circuit and held that a collective bargaining agreement that requires employees to arbitrate discrimination claims is enforceable. The High Court found, "[a]s in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective bargaining agreement in return for other concessions from the employer. . . . [c]ourts generally may not interfere in this bargained for exchange." The Court further held, in response to Respondents' reliance on Gardner-Denver, that although Title VII, the ADA, and the ADEA protect important substantive rights, they do not prohibit employees from pursuing these rights in arbitration. Consequently, a union may agree to submit employees' discrimination claims to binding arbitration.
Petitioner 14 Penn Plaza LLC owns and operates the New York City office building where Respondents worked as night lobby watchmen and other similar capacities pursuant to a collective bargaining agreement (CAB) which provided that all claims made under Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) were subject to binding arbitration. After 14 Penn Plaza, with the Union's consent, engaged licensed security guards for the building, Respondents were reassigned to jobs as porters and cleaners. Arguing the reassignments led to a loss in income, other damages, and were otherwise less desirable than their former positions, Respondents asked their Union to file grievances alleging, among other things, that 14 Penn Plaza violated the CBA's ban on workplace discrimination by reassigning Respondents on the basis of their age in violation of Age Discrimination in Employment Act of 1967. The Union requested arbitration under the CBA, but withdrew the age-discrimination claims on the ground that its consent to the new security contract precluded it from objecting to Respondents' reassignments as discriminatory. Following a four-day hearing, the arbitrator denied all of the remaining claims.
The employees then filed a lawsuit in federal district court alleging that their reassignment violated the ADEA. Believing the issue had already been resolved by arbitration, 14 Penn Plaza asked the court to dismiss the lawsuit or, in the alternative, to refer the case back to arbitration to resolve the federal claims of age discrimination. The court did neither, but rather held the CBA arbitration provision violated Respondents' rights to pursue their claims in a federal courtroom. On appeal, the U.S. Court of Appeals for the Second Circuit agreed, holding, "[a] union negotiated mandatory arbitration agreement purporting to waive a covered worker's right to a federal forum with respect to statutory rights is unenforceable."
Existing precedent includes a 1974 case, Alexander v. Gardner-Denver, where the Supreme Court held that union-negotiated arbitration agreements regarding federal rights are unenforceable. Thereafter, in Gilmer v. Interstate/Johnson Lane, the court held that individual arbitration agreements are enforceable as long as their terms are "clear and unmistakable." The Supreme Court's uncertainty on this issue has caused a great deal of confusion among lower courts.
On April 1, 2009, in a 5-4 decision, the Supreme Court reversed the Second Circuit and held that a collective bargaining agreement that requires employees to arbitrate discrimination claims is enforceable. The High Court found, "[a]s in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective bargaining agreement in return for other concessions from the employer. . . . [c]ourts generally may not interfere in this bargained for exchange." The Court further held, in response to Respondents' reliance on Gardner-Denver, that although Title VII, the ADA, and the ADEA protect important substantive rights, they do not prohibit employees from pursuing these rights in arbitration. Consequently, a union may agree to submit employees' discrimination claims to binding arbitration.
Thursday, March 12, 2009
San Francisco Health Care Security Ordinance
San Francisco's controversial Health Care Security Ordinance, requiring employers to pay assigned amounts of money toward employees’ health care, may be heading toward argument at the U.S. Supreme Court. On March 9, 2009, the United States Court of Appeals for the Ninth Circuit ruled (by majority of a split decision 11-judge panel) on a petition for rehearing, rejecting the argument that the Employee Retirement Income Security Act (ERISA) prevented the city and labor groups from requiring employer-provided health care.
Wednesday, March 11, 2009
EFCA INTRODUCED IN CONGRESS
The long-awaited and much-anticipated Employee Free Choice Act (EFCA) was finally introduced in Congress on March 10, 2009, initiating a new battle between Democrats who argue the bill will bolster the economy and business groups that contend it is an employment killer. The EFCA, which is strongly supported by President Obama, was presented by Democrats in both the U.S. House of Representatives, where it is anticipated to receive overwhelming support, and the Senate, where it will likely confront greater resilience.
As proposed, the EFCA would amend the National Labor Relations Act (NLRA) by eradicating secret ballot elections and replacing them with a card-check procedure that would require unions only to obtain signed authorization cards by a majority of employees in order to organize. If passed, the EFCA, which also contains mandatory arbitration provisions and considerable increases in employer violation penalties, is expected to result in a union membership increase from the current 7.5% of the United States work force to 20%.
As proposed, the EFCA would amend the National Labor Relations Act (NLRA) by eradicating secret ballot elections and replacing them with a card-check procedure that would require unions only to obtain signed authorization cards by a majority of employees in order to organize. If passed, the EFCA, which also contains mandatory arbitration provisions and considerable increases in employer violation penalties, is expected to result in a union membership increase from the current 7.5% of the United States work force to 20%.
Tuesday, March 10, 2009
PROPOSED LEGISLATION MAY CURB SETTLEMENT CONFIDENTIALITY AGREEMENTS
Two United State Senators (Herb Kohl, D-Wisconcin, and Lindsey Graham, R-South Carolina) have introduced legislation that would require courts to consider public health and safety against confidentiality before sealing certain information included in settlement agreements. The proposed bill, which was referred to the Senate Judiciary Committee, would “curb the ongoing abuse of secrecy orders in the federal courts,” Kohl told the Senate.
Under the bill, judges must consider public health and safety before granting a protective order or sealing court records and settlement agreements. Judges would have the discretion to grant or deny secrecy based on an assessment that considers public interest in a potential public health and safety hazard and legitimate interests of privacy. The Bill follows dozens of noted cases in which hazards and threats to public health were not disclosed during court settlements and subsequently resulted in additional fatalities, serious injuries, and illnesses.
Senator Kohl cited Bridgestone - Firestone Inc. as the most famous example of the secretive agreements. He said the company settled dozens of lawsuits secretly as tread separations on tires were causing accidents across the country, many resulting in serious injuries and fatalities. However, it was a news report in 1999 that prompted the company to recall 6.5 million tires. By that time, it was too late for the more than 250 people who had been killed and more than 800 injured in accidents related to defective tires.
While this legislation is neither directly related to nor focused on employment law, it is significant to note that, as proposed, many employment and labor litigation settlement agreements may be directed by such a new law (i.e., whistleblowing, OSHA, etc.).
Under the bill, judges must consider public health and safety before granting a protective order or sealing court records and settlement agreements. Judges would have the discretion to grant or deny secrecy based on an assessment that considers public interest in a potential public health and safety hazard and legitimate interests of privacy. The Bill follows dozens of noted cases in which hazards and threats to public health were not disclosed during court settlements and subsequently resulted in additional fatalities, serious injuries, and illnesses.
Senator Kohl cited Bridgestone - Firestone Inc. as the most famous example of the secretive agreements. He said the company settled dozens of lawsuits secretly as tread separations on tires were causing accidents across the country, many resulting in serious injuries and fatalities. However, it was a news report in 1999 that prompted the company to recall 6.5 million tires. By that time, it was too late for the more than 250 people who had been killed and more than 800 injured in accidents related to defective tires.
While this legislation is neither directly related to nor focused on employment law, it is significant to note that, as proposed, many employment and labor litigation settlement agreements may be directed by such a new law (i.e., whistleblowing, OSHA, etc.).
EMPLOYMENT LAW NEWSLETTER
CALIFORNIA SUPREME COURT GREENLIGHTS PUBLIC EMPLOYEE'S WHISTLEBLOWER SUIT
On February 26, 2008, the California Supreme Court, reversing a decision from the California Court of Appeal for the Third District, ruled the California Whistleblower Protection Act does not require state workers to exhaust remedies with the State Personnel Board before seeking damages in court. The decision in the matter of the State Board of Chiropractic Examiners (SBCE) v. Superior Court, Caroline M. Arbuckle, Real Party In Interest, stems from Carole Arbuckle reporting to her supervisor at the SBCE, that the SBCE chairperson had allowed her professional license to lapse, and asking several times whether she should issue the chairperson a citation. The complaint alleged as a result of Arbuckle's reporting, she experienced a "stressful work environment, including numerous indignities, disputes and acts of favoritism." Further, Arbuckle's duties were changed, she was transferred to a different unit, and her requests for a modified work schedule were denied. She complained to the State Personnel Board in July 2002, alleging whistleblower retaliation, but the board dismissed her complaint. Rather than appealing the board's decision, she sued the SBCE in Superior Court. The SBCE moved for summary judgment, arguing Arbuckle had not exhausted her administrative remedies, and the trial court denied that motion. The SBCE appealed that ruling to the appellate court, which held the trial court should have granted the defendant summary judgment. The Third District ruled the law required the employee to appeal the board's adverse decision to an administrative law judge, and if the board denied an ALJ hearing, the employee should have sought a writ of mandate from the courts to set aside the board decision. Thereafter, the Supreme Court granted Arbuckle's petition for review.
The California Supreme Court found the plain language of the California Whistleblower Protection Act requires only that state employees file a complaint with the personnel board before seeking damages in superior court. The Supreme Court held the state whistleblower law gives employees the right to seek a "completely separate damages action," eliminating the need for the exhaustion of administrative remedies: "[e]xhaustion of every possible state of administrative process is not particularly necessary where the civil action that the Legislature authorized is not one to review the administrative decision, but rather a completely independent remedy."
Please direct any questions or comments you have regarding this item to Basham Parker Attorney and Partner, Alden J. Parker. Mr. Parker has extensive experience representing public employers in matters of litigation, agency claims and hearing, and workplace training.
COMING SOON: THE EMPLOYEE FREE CHOICE ACT
On March 3, 2009, AFL-CIO Executive Council member and union leader James Williams said he expects the controversial Employee Free Choice Act to pass in the next four or five months. On March 2, 2009, Secretary of Labor Hilda Solis met with the Executive Council and Vice President Joe Biden conducted a closed-door address to AFL-CIO leaders on March 4, 2009.
The meetings between high-ranking government officials and union leaders illustrate a marked difference between the relationship organized labor enjoys with the Obama administration compared to the relationship with the Bush administration. Williams stated, the Council is trying to touch base with Capitol Hill and line up the necessary votes to get the EFCA though Congress. Although Democrats lack a filibuster-proof majority in the Senate, Williams suggested additional support from "friendly Republicans."
DOL PRELIMINARY GUIDANCE ON ECONOMIC STIMULUS PACKAGE COBRA SUBSIDY
The U.S. Department of Labor has issued preliminary direction on how the COBRA subsidy recently passed by Congress as part of the economic stimulus package should be handled by employers, noting additional guidance is still being prepared. COBRA programs give workers who lose their employer-sponsored health benefits the right to continue those benefits for a limited period of time; however, individuals who qualify can be required to pay the entire premium for coverage - up to 102% of the cost of the plan, an expense that can be too expensive for many workers who find themselves without a job. The stimulus bill passed by Congress last month, known as the American Recovery and Reinvestment Act of 2009 (ARRA), provided for a 65% government subsidy of the premiums paid for health care coverage under COBRA programs for up to nine months.
Those who can take advantage of the subsidy are employees who were eligible for COBRA continuation coverage between September 1, 2008, and December 31, 2009, and were involuntarily terminated during that period. Employees who can be covered under another health plan, such as one provided by their spouse's employer or Medicare, are not eligible for the subsidy.
The subsidy will apply to premiums paid for periods of COBRA coverage beginning on or after February 17, 2009. Those eligible for the subsidy will be treated as having paid the full premium and the 65% reduction will be reimbursable to the employer, insurer, or health plan as a credit against certain employment taxes.
Employees who were laid off between September 1, 2008, and February 16, 2009, who did not elect COBRA coverage when it was first offered, or who did elect it but are no longer enrolled, have a new 60-day post employer notice window to elect subsidized coverage.
Income standards have been clarified as well. If a worker's income exceeds $145,000 (or $290,000 for joint filers) in the year he or she receives a premium deduction, the subsidy reduction amount will have to be repaid in full. Taxpayers who make between $125,000 and $145,000 (or between $250,000 and $290,000 for joint filers) will have to repay a portion of the premium reduction.
The Labor Department is developing an appeals process for those who think they have been improperly denied eligibility for the COBRA premium reduction and, as earlier set forth, additional guidance on the COBRA subsidy program should be released soon.
Employers are reminded they are still required to notify affected employees of their right to elect COBRA coverage, and that the employee and his or her family have 60 days to make that decision before they lose rights to those benefits.
FAIR EMPLOYMENT AND HOUSING COMMISSION ISSUES COMPARISON TABLES
Continuing its efforts to navigate employers through the vast and complex workplace laws related to the employment of individuals with disabilities and related leave issues, the California Fair Employment and Housing Commission has developed two useful tables: the first comparing the Americans with Disabilities Act, the ADA Amendments Act of 2008, and related provisions of the Fair Employment and Housing (ADA/ADAAA/FEHA Table); and the second comparing the differences between the new Family and Medical Leave Act and the California Family Rights Act and pregnancy disability leave law (FMLA/CFRA/PDL Table).
EMPLOYMENT LAW ALERT UPDATE: GINA REGULATIONS
As Basham Parker first reported in its February 27, 2009, Employment Law Alert, the Equal Employment Opportunity Commission issued proposed regulations intended to implement the Genetic Information Nondiscrimination Act of 2008 (GINA). Those proposed rules have now been posted and are available for viewing on the EEOC website (GINA Regulations). Comments regarding this proposal must be received by the Commission on or before May 1, 2009. Basham Parker welcomes your comments and questions regarding these proposed regulations by email to clientservices@bashamparker.com.
BASHAM PARKER IN THE NEWS
Basham Parker is pleased to acknowledge Attorney and Partner, Alden J. Parker, for his recent contributions to the February 2009 edition of Comstock's Magazine. Parker was interviewed by Bill Romanelli regarding the Worker Adjustment and Retraining Notification Act (WARN), comparable California State WARN law (often referred to as "baby WARN), newly enacted federal and California State legislation (including Assembly Bill 28), and the status of specific California State case law (Brinker Restaurant Corp. v. Superior Court of San Diego County). The article is titled, "You've Been WARNed," and Parker's comments may be viewed online (Comstock's Magazine, "You've Been WARNed").
WELCOME NEW ATTORNEY RACHAEL JUNG
Basham Parker is pleased to announce Rachael Jung has joined the Firm as an Associate Attorney in its San Francisco Bay Area office. Rachael received her Bachlor of Arts degree in Psychology and Legal Studies from the University of California, Berkeley, and her Juris Doctor from Pepperdine University School of Law. She brings to Basham Parker additional legal experience focused on employment law matters. Please join us in welcoming Rachael to our Firm.
On February 26, 2008, the California Supreme Court, reversing a decision from the California Court of Appeal for the Third District, ruled the California Whistleblower Protection Act does not require state workers to exhaust remedies with the State Personnel Board before seeking damages in court. The decision in the matter of the State Board of Chiropractic Examiners (SBCE) v. Superior Court, Caroline M. Arbuckle, Real Party In Interest, stems from Carole Arbuckle reporting to her supervisor at the SBCE, that the SBCE chairperson had allowed her professional license to lapse, and asking several times whether she should issue the chairperson a citation. The complaint alleged as a result of Arbuckle's reporting, she experienced a "stressful work environment, including numerous indignities, disputes and acts of favoritism." Further, Arbuckle's duties were changed, she was transferred to a different unit, and her requests for a modified work schedule were denied. She complained to the State Personnel Board in July 2002, alleging whistleblower retaliation, but the board dismissed her complaint. Rather than appealing the board's decision, she sued the SBCE in Superior Court. The SBCE moved for summary judgment, arguing Arbuckle had not exhausted her administrative remedies, and the trial court denied that motion. The SBCE appealed that ruling to the appellate court, which held the trial court should have granted the defendant summary judgment. The Third District ruled the law required the employee to appeal the board's adverse decision to an administrative law judge, and if the board denied an ALJ hearing, the employee should have sought a writ of mandate from the courts to set aside the board decision. Thereafter, the Supreme Court granted Arbuckle's petition for review.
The California Supreme Court found the plain language of the California Whistleblower Protection Act requires only that state employees file a complaint with the personnel board before seeking damages in superior court. The Supreme Court held the state whistleblower law gives employees the right to seek a "completely separate damages action," eliminating the need for the exhaustion of administrative remedies: "[e]xhaustion of every possible state of administrative process is not particularly necessary where the civil action that the Legislature authorized is not one to review the administrative decision, but rather a completely independent remedy."
Please direct any questions or comments you have regarding this item to Basham Parker Attorney and Partner, Alden J. Parker. Mr. Parker has extensive experience representing public employers in matters of litigation, agency claims and hearing, and workplace training.
COMING SOON: THE EMPLOYEE FREE CHOICE ACT
On March 3, 2009, AFL-CIO Executive Council member and union leader James Williams said he expects the controversial Employee Free Choice Act to pass in the next four or five months. On March 2, 2009, Secretary of Labor Hilda Solis met with the Executive Council and Vice President Joe Biden conducted a closed-door address to AFL-CIO leaders on March 4, 2009.
The meetings between high-ranking government officials and union leaders illustrate a marked difference between the relationship organized labor enjoys with the Obama administration compared to the relationship with the Bush administration. Williams stated, the Council is trying to touch base with Capitol Hill and line up the necessary votes to get the EFCA though Congress. Although Democrats lack a filibuster-proof majority in the Senate, Williams suggested additional support from "friendly Republicans."
DOL PRELIMINARY GUIDANCE ON ECONOMIC STIMULUS PACKAGE COBRA SUBSIDY
The U.S. Department of Labor has issued preliminary direction on how the COBRA subsidy recently passed by Congress as part of the economic stimulus package should be handled by employers, noting additional guidance is still being prepared. COBRA programs give workers who lose their employer-sponsored health benefits the right to continue those benefits for a limited period of time; however, individuals who qualify can be required to pay the entire premium for coverage - up to 102% of the cost of the plan, an expense that can be too expensive for many workers who find themselves without a job. The stimulus bill passed by Congress last month, known as the American Recovery and Reinvestment Act of 2009 (ARRA), provided for a 65% government subsidy of the premiums paid for health care coverage under COBRA programs for up to nine months.
Those who can take advantage of the subsidy are employees who were eligible for COBRA continuation coverage between September 1, 2008, and December 31, 2009, and were involuntarily terminated during that period. Employees who can be covered under another health plan, such as one provided by their spouse's employer or Medicare, are not eligible for the subsidy.
The subsidy will apply to premiums paid for periods of COBRA coverage beginning on or after February 17, 2009. Those eligible for the subsidy will be treated as having paid the full premium and the 65% reduction will be reimbursable to the employer, insurer, or health plan as a credit against certain employment taxes.
Employees who were laid off between September 1, 2008, and February 16, 2009, who did not elect COBRA coverage when it was first offered, or who did elect it but are no longer enrolled, have a new 60-day post employer notice window to elect subsidized coverage.
Income standards have been clarified as well. If a worker's income exceeds $145,000 (or $290,000 for joint filers) in the year he or she receives a premium deduction, the subsidy reduction amount will have to be repaid in full. Taxpayers who make between $125,000 and $145,000 (or between $250,000 and $290,000 for joint filers) will have to repay a portion of the premium reduction.
The Labor Department is developing an appeals process for those who think they have been improperly denied eligibility for the COBRA premium reduction and, as earlier set forth, additional guidance on the COBRA subsidy program should be released soon.
Employers are reminded they are still required to notify affected employees of their right to elect COBRA coverage, and that the employee and his or her family have 60 days to make that decision before they lose rights to those benefits.
FAIR EMPLOYMENT AND HOUSING COMMISSION ISSUES COMPARISON TABLES
Continuing its efforts to navigate employers through the vast and complex workplace laws related to the employment of individuals with disabilities and related leave issues, the California Fair Employment and Housing Commission has developed two useful tables: the first comparing the Americans with Disabilities Act, the ADA Amendments Act of 2008, and related provisions of the Fair Employment and Housing (ADA/ADAAA/FEHA Table); and the second comparing the differences between the new Family and Medical Leave Act and the California Family Rights Act and pregnancy disability leave law (FMLA/CFRA/PDL Table).
EMPLOYMENT LAW ALERT UPDATE: GINA REGULATIONS
As Basham Parker first reported in its February 27, 2009, Employment Law Alert, the Equal Employment Opportunity Commission issued proposed regulations intended to implement the Genetic Information Nondiscrimination Act of 2008 (GINA). Those proposed rules have now been posted and are available for viewing on the EEOC website (GINA Regulations). Comments regarding this proposal must be received by the Commission on or before May 1, 2009. Basham Parker welcomes your comments and questions regarding these proposed regulations by email to clientservices@bashamparker.com.
BASHAM PARKER IN THE NEWS
Basham Parker is pleased to acknowledge Attorney and Partner, Alden J. Parker, for his recent contributions to the February 2009 edition of Comstock's Magazine. Parker was interviewed by Bill Romanelli regarding the Worker Adjustment and Retraining Notification Act (WARN), comparable California State WARN law (often referred to as "baby WARN), newly enacted federal and California State legislation (including Assembly Bill 28), and the status of specific California State case law (Brinker Restaurant Corp. v. Superior Court of San Diego County). The article is titled, "You've Been WARNed," and Parker's comments may be viewed online (Comstock's Magazine, "You've Been WARNed").
WELCOME NEW ATTORNEY RACHAEL JUNG
Basham Parker is pleased to announce Rachael Jung has joined the Firm as an Associate Attorney in its San Francisco Bay Area office. Rachael received her Bachlor of Arts degree in Psychology and Legal Studies from the University of California, Berkeley, and her Juris Doctor from Pepperdine University School of Law. She brings to Basham Parker additional legal experience focused on employment law matters. Please join us in welcoming Rachael to our Firm.
Friday, February 27, 2009
EMPLOYMENT LAW ALERT
EEOC ISSUES HIGHLY-ANTICIPATED GENETIC INFORMATION NONDISCRIMINATION ACT (GINA) EMPLOYMENT REGULATIONS
On Wednesday, the U.S. Equal Employment Opportunity Commission (EEOC) proposed rules to implement the employment provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA). "The addition of genetic information discrimination to the EEOC's mandate is historic, and represents the first legislative expansion of the EEOC's jurisdiction since the Americans with Disabilities Act passed in 1990," said Acting EEOC Chairman Stuart J. Ishimaru.
GINA prohibits discrimination on the basis of genetic information in employment and health insurance. Specifically, the law prohibits: (1) unauthorized or required genetic testing of workers by employers and insurers; (2) employers from seeking out genetic information about employees; and, (3) employers from disclosing genetic information about employees and using genetic tests to discriminate against workers in hiring, firing, and other employment decisions. GINA's employment law provisions become effective November 21, 2009, while its health insurance benefits generally begin on May 21, 2009.
A 60-day public comment period for the new employment provisions commenced on February 25, 2009, and the EEOC has reported the notice of proposed rulemaking would be published in the Federal Register by Friday, February 27, 2009.
Included in the proposed regulations is a stipulation that employers will not be punished for neutral policies that have a disparate impact on employees with genetic diseases. Moreover, the final rules will clarify instances where employers "inadvertently acquire or disclose" genetic information and may be exempt from liability.
Regulations, rules, stipulations, and exemptions aside, GINA opens a brand new door to employee discrimination claims, and increased litigation is predicted by most. Prior to the November 21, 2009, effective date, employers should familiarize themselves with this new field of potential liability and carefully review and consider GINA's responsibilities and restrictions. At first glance, many employers will likely believe GINA will not influence their specific workplace and is very commonsense. Consider this: a manager who visits a sick employee in the hospital and learns the employee's malady has a genetic basis would not have obtained that information inadvertently.
The potential for inadvertent acquisition or disclosure is not implausible given GINA's definition of "genetic information," which includes "the manifestation of a disease or disorder in family members"; and, because GINA does not require a knowing acquisition or disclosure to support a claim. Employer advocates will certainly take advantage of the impending 60-day public comment period to attempt to further clarify many of these alarming concerns.
Basham Parker LLP will continue to provide updates related to the Genetic Information Nondiscrimination Act of 2008 as they develop. For additional information, please visit our website at http://rs6.net/tn.jsp?t=annspycab.0.0.rre7uhcab.0&ts=S0387&p=http%3A%2F%2Fwww.bashamparker.com%2F&id=preview.
On Wednesday, the U.S. Equal Employment Opportunity Commission (EEOC) proposed rules to implement the employment provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA). "The addition of genetic information discrimination to the EEOC's mandate is historic, and represents the first legislative expansion of the EEOC's jurisdiction since the Americans with Disabilities Act passed in 1990," said Acting EEOC Chairman Stuart J. Ishimaru.
GINA prohibits discrimination on the basis of genetic information in employment and health insurance. Specifically, the law prohibits: (1) unauthorized or required genetic testing of workers by employers and insurers; (2) employers from seeking out genetic information about employees; and, (3) employers from disclosing genetic information about employees and using genetic tests to discriminate against workers in hiring, firing, and other employment decisions. GINA's employment law provisions become effective November 21, 2009, while its health insurance benefits generally begin on May 21, 2009.
A 60-day public comment period for the new employment provisions commenced on February 25, 2009, and the EEOC has reported the notice of proposed rulemaking would be published in the Federal Register by Friday, February 27, 2009.
Included in the proposed regulations is a stipulation that employers will not be punished for neutral policies that have a disparate impact on employees with genetic diseases. Moreover, the final rules will clarify instances where employers "inadvertently acquire or disclose" genetic information and may be exempt from liability.
Regulations, rules, stipulations, and exemptions aside, GINA opens a brand new door to employee discrimination claims, and increased litigation is predicted by most. Prior to the November 21, 2009, effective date, employers should familiarize themselves with this new field of potential liability and carefully review and consider GINA's responsibilities and restrictions. At first glance, many employers will likely believe GINA will not influence their specific workplace and is very commonsense. Consider this: a manager who visits a sick employee in the hospital and learns the employee's malady has a genetic basis would not have obtained that information inadvertently.
The potential for inadvertent acquisition or disclosure is not implausible given GINA's definition of "genetic information," which includes "the manifestation of a disease or disorder in family members"; and, because GINA does not require a knowing acquisition or disclosure to support a claim. Employer advocates will certainly take advantage of the impending 60-day public comment period to attempt to further clarify many of these alarming concerns.
Basham Parker LLP will continue to provide updates related to the Genetic Information Nondiscrimination Act of 2008 as they develop. For additional information, please visit our website at http://rs6.net/tn.jsp?t=annspycab.0.0.rre7uhcab.0&ts=S0387&p=http%3A%2F%2Fwww.bashamparker.com%2F&id=preview.
Monday, February 16, 2009
FEDERAL AND CALIFORNIA STATE WARN LEGISLATION
As the national economy continues to deteriorate, an unparalleled number of businesses have been financially devastated, many to the point of closing operations, and others facing the unpleasant realization of mass layoffs. The U.S. Labor Department recently reported 21,137 mass layoffs took place in 2008, resulting in the termination of more than 2.1 million workers. As employers analyze the advantages and disadvantages of mass layoffs and strategize the least laborious manner to implement cutbacks, it is also essential they familiarize themselves with the legal responsibilities associated with these decisions.
Enacted in 1988, the Federal Worker Adjustment and Retraining Notification ("WARN") Act requires covered employers give affected employees at least 60-days notice of a plant closing or mass layoff. Fifteen years later, the California Legislature created an additional obligation for California employers to consider when conducting layoffs and plant closings in the form of the "Baby-WARN" Act. Although similar to the companion federal law in many respects, Baby-WARN extend coverage to businesses with as few as 75 employees and to layoffs of 50 or more employees regardless of the size of the business. In contrast, WARN applies to businesses employing 100 or more full-time employees and to layoffs of 50 or more full-time employees, if the layoff affects 33% of the workforce at a single site or 500 or more people at a single site, during a 30-day period. While the federal statute was accompanied by extensive regulations and guidance from the U.S. Department of Labor, the California legislation passed with little guidance.
Employers who fail to provide the required notice face potential class-action litigation with severe damages and penalties. On February 9, 2009, dynamic random access memory (DRAM) maker Qimonda AG was stricken with a putative class action filed by former factory employees who claim the company violated the Federal WARN Act by failing to give them proper notice before shutting its Virginia plant. (Blair et al. v. Qimonda North America Corp. et al., Case Number 09-CV-00073, in the U.S. District Court for the Eastern District of Virginia.)
According to the current complaint, at least 1,000 workers at Qimonda's Virginia facility were adversely affected by the company's failure to give notice prior to closing the plant on February 4, 2009. Plaintiffs' allege Qimonda failed to pay wages, make pension and 401(k) contributions, and provide health insurance coverage for the 60-day period following their dismissal, in violation of the WARN Act.
The plaintiffs are seeking damages equal to the sum of unpaid wages, salary, commissions, bonuses, accrued holiday and vacation pay, and pension and 401(k) contributions for 60 working days. They also are asking for health insurance coverage and other fringe benefits under the Employee Retirement Income Security Act (ERISA) for 60 working days, attorneys' fees and other costs.
Employers wishing to avoid the harsh realities now facing Qimonda should (1) carefully consider the potential legal ramifications associated with layoffs and other employment decisions made during difficult economic times and (2) always consult with knowledgeable and experienced employment counsel making similar determinations.
As the national economy continues to deteriorate, an unparalleled number of businesses have been financially devastated, many to the point of closing operations, and others facing the unpleasant realization of mass layoffs. The U.S. Labor Department recently reported 21,137 mass layoffs took place in 2008, resulting in the termination of more than 2.1 million workers. As employers analyze the advantages and disadvantages of mass layoffs and strategize the least laborious manner to implement cutbacks, it is also essential they familiarize themselves with the legal responsibilities associated with these decisions.
Enacted in 1988, the Federal Worker Adjustment and Retraining Notification ("WARN") Act requires covered employers give affected employees at least 60-days notice of a plant closing or mass layoff. Fifteen years later, the California Legislature created an additional obligation for California employers to consider when conducting layoffs and plant closings in the form of the "Baby-WARN" Act. Although similar to the companion federal law in many respects, Baby-WARN extend coverage to businesses with as few as 75 employees and to layoffs of 50 or more employees regardless of the size of the business. In contrast, WARN applies to businesses employing 100 or more full-time employees and to layoffs of 50 or more full-time employees, if the layoff affects 33% of the workforce at a single site or 500 or more people at a single site, during a 30-day period. While the federal statute was accompanied by extensive regulations and guidance from the U.S. Department of Labor, the California legislation passed with little guidance.
Employers who fail to provide the required notice face potential class-action litigation with severe damages and penalties. On February 9, 2009, dynamic random access memory (DRAM) maker Qimonda AG was stricken with a putative class action filed by former factory employees who claim the company violated the Federal WARN Act by failing to give them proper notice before shutting its Virginia plant. (Blair et al. v. Qimonda North America Corp. et al., Case Number 09-CV-00073, in the U.S. District Court for the Eastern District of Virginia.)
According to the current complaint, at least 1,000 workers at Qimonda's Virginia facility were adversely affected by the company's failure to give notice prior to closing the plant on February 4, 2009. Plaintiffs' allege Qimonda failed to pay wages, make pension and 401(k) contributions, and provide health insurance coverage for the 60-day period following their dismissal, in violation of the WARN Act.
The plaintiffs are seeking damages equal to the sum of unpaid wages, salary, commissions, bonuses, accrued holiday and vacation pay, and pension and 401(k) contributions for 60 working days. They also are asking for health insurance coverage and other fringe benefits under the Employee Retirement Income Security Act (ERISA) for 60 working days, attorneys' fees and other costs.
Employers wishing to avoid the harsh realities now facing Qimonda should (1) carefully consider the potential legal ramifications associated with layoffs and other employment decisions made during difficult economic times and (2) always consult with knowledgeable and experienced employment counsel making similar determinations.
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