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Recent Court of Appeals Decision Clarifies Important Points of the FMLA – Part 2

Continuing from our Part 1 article, in Waag v. Sotera Defense Sols. Inc., 2017 BL 163037, 4th Cir., No. 15-2521, 5/16/17), Waag also argues that Sotera interfered with his FMLA rights by terminating him a little more than one month after his return from medical leave.  Waag claims that Sotera did not restore him to a real position. Rather, Waag believes that his post-leave job was, in fact, a sham position, created to make it appear that Waag had been restored to an equivalent position but that, in actuality, was slated for elimination. Basically, Waag thinks Sotera decided to fire him while he was on leave and then did so by placing him in a make-work job after he returned. The district court rejected this argument, concluding that Waag would have been discharged regardless of whether or not he had taken leave. The district court noted that Waag’s termination was inevitable in light of Sotera’s dire financial circumstances as a result of sequestration, the lack of work under a particular government contract Waag was to be working on (the “NexGen” contract), and Waag’s status as an indirect employee paid out of overhead. On appeal, Waag contends that summary judgment was inappropriate because a triable question of fact exists as to whether his post-leave position was a sham, essentially scheduled to be eliminated after a few weeks. Waag relies on an FMLA regulation that fleshes out the limitations on the right to reinstatement recognized in the statute. The regulation provides, in relevant part, that “[a]n employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period,” meaning that an employer may deny restoration completely if the employer “show[s] that an employee would not otherwise have been employed at the time reinstatement is requested.” 29 C.F.R. § 825.216(a). However, “[r]estoration to a job slated for lay-off when the employee’s original position is not would not meet the requirements of an equivalent position.” 29 C.F.R. § 825.216(a)(1). Waag suggests that there is sufficient record evidence for a jury to conclude that (1) after he returned from leave, Waag was put in a “sham” job that was essentially slated for elimination, and (2) that Waag would not have been laid off if he had not taken leave because his original job was never eliminated, as demonstrated by the fact that another employee who took over Waag’s position while he was on leave continued to serve as the NexGen Project Manager until October 2015. Were both of these assertions true, then Sotera’s placement of Waag in the EWP job “would not meet the requirements of an equivalent position.” The Court of Appeals concluded, however, that no reasonable juror would believe, based on the record, that Waag was put in a short-term sham job to cover Sotera’s decision to fire Waag when he returned from leave. Waag argues that a jury could conclude that the job Sotera gave Waag following medical leave “was a fake or sham position” based largely on “temporal proximity”—that is, he was placed in a new business development job that was eliminated approximately six weeks later. Waag points out that obtaining government contract work involves a protracted bidding process, and he argues that his business development position was eliminated well before he had a chance to generate any revenue. Waag, however, points to no actual evidence in the record that would permit a jury to conclude—without speculating—that the post-leave job was a sham. The Court of Appeals determined that the undisputed evidence shows that Waag’s position was genuine and that it was not slated for lay-offs at the time that Waag returned from leave. The Vice President was assigned to the same division, which, at the time Waag joined, was working toward winning a contract worth 70 or 80 million dollars. Indeed, Waag worked on the proposal as well. Although Sotera’s bid was ultimately unsuccessful, it was a real bid. And if it was a sham, it was an elaborate one that affected other people—notably, a vice president, also lost his job following the failed bid. Therefore, the Court of Appeals concluded that Waag failed to adduce sufficient evidence to create a genuine issue of material fact such that a reasonable factfinder could conclude the adverse employment action was taken for an impermissible reason, i.e., retaliation.

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Bruce Luchansky May 18 No Comments

Recent Court of Appeals Decision Clarifies Important Points of the FMLA – Part 1

In Waag v. Sotera Defense Sols. Inc., 2017 BL 163037, 4th Cir., No. 15-2521, 5/16/17), Gary Waag brought an action alleging that his former employer, Sotera Defense Solutions, Inc., violated the Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq., by not restoring Waag to his position when he returned from two-months-plus of medical leave; by placing him in a new job that was not equivalent to the one he held before he went on leave; and by terminating Waag from the new job because he took medical leave.  The district court granted summary judgment to Sotera, and Waag appealed.  The Court of Appeals affirmed and explained with the following analysis. Under the FMLA, “an eligible employee” is “entitled to a total of 12 workweeks of leave during any 12-month period” for family- and health-related reasons. 29 U.S.C. § 2612(a)(1) . An employee who takes leave under § 2612 shall be entitled, on return from such leave— (A) to be restored by the employer to the position of employment held by the employee when the leave commenced; or (B) to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment. 29 U.S.C. § 2614(a)(1). The FMLA makes it “unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under [the FMLA].” 29 U.S.C. § 2615(a)(1). Claims for violations of the prescriptive rights set forth in § 2612 are “known as ‘interference’ or ‘entitlement’ claims.” Additionally, the FMLA contains proscriptive provisions that protect employees from discrimination or retaliation for exercising their substantive rights under the FMLA. The retaliation provision states that “[i]t shall be unlawful for any employer to discharge or in any other manner discriminate against any individual for opposing any practice made unlawful by this title.” 29 U.S.C. § 2615(a)(2) . Waag first argues that Sotera interfered with his FMLA rights by failing to restore Waag after he returned from leave to his former position with the company even though the position was still available.  As is clear from its plain language, however, the FMLA does not require an employer to restore an employee returning from leave to his previous position no matter what. The FMLA provides that an eligible employee “shall be entitled, on return from such leave—(A) to be restored . . . to the position of employment held by the employee when the leave commenced; or (B) to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.” 29 U.S.C. § 2614(a)(1). Congress provided restoration rights in the disjunctive, meaning that restoration of a covered employee to either position—the employee’s original job or a different job that is “equivalent” within the meaning of the statute—will suffice to satisfy § 2614(a)(1) .  The text has a plain and unambiguous meaning—that an employee who takes FMLA leave has the right to be restored either to his original position or to an equivalent position. Furthermore, the restoration provision does not indicate a preference for restoring covered employees to their pre-leave positions over “equivalent” positions, and it does not require an employer to hold open an employee’s original position while that employee is on leave. Waag would have us rewrite the FMLA by adopting his preferred reading of the text. Although Congress is free to revise the statute so that an employer can restore an employee to an equivalent position only if the employee’s original job no longer exists, this court is not empowered to do so. Pursuant to the plain terms of § 2614(a)(1) , Sotera had the option of placing Waag in a job equivalent to his original, pre-leave job. Waag did not have an absolute right to return to his original position. Thus, we conclude the district court correctly rejected Waag’s legal contention that Sotera interfered with his FMLA rights by not restoring him to his pre-leave position. TAKEAWAY: After returning from FMLA leave, employees do not have an absolute right to return to their original position. Employers are able to fully comply with the law by restoring an employee to an equivalent position even if the original position is still available. The law does not indicate a preference for restoring covered employees to their pre-leave positions over “equivalent” positions, and it does not require an employer to hold open an employee’s original position while that employee is on leave.

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Bruce Luchansky May 17 No Comments

Maryland’s Highest Court Dismisses Wrongful Termination Claim

The Maryland Court of Appeals in Yuan v. Johns Hopkins University refused to recognize the federal regulations prohibiting research misconduct as a clear “public policy” that can support a tort claim for wrongful termination of employment. The court also held that the University had properly denied the former employee access to research materials and records, upon his termination. Factual Background In a suit brought by Daniel S. Yuan, M.D., a former employee of Johns Hopkins University, Dr. Yuan alleged that he had been terminated for reporting research misconduct that violated 42 U.S.C. § 289b and 42 C.F.R. Part 93, in connection with a federally funded project at the University. Dr. Yuan claimed that he repeatedly reported research misconduct involving a particular project, and that he was terminated from the University as a result of those reports. Under a theory of conversion, Dr. Yuan also alleged that the University violated its own policy by first granting, but then ultimately denying, him access to his research materials and records upon termination. Court’s Analysis In Maryland, an at-will employee like Dr. Yuan may be lawfully terminated at any time. However, Maryland courts recognize a “public policy” exception to the at-will employment rule when the reason for termination contravenes a clear mandate of public policy (e.g., being terminated for refusing to engage in unlawful conduct). In its unpublished opinion affirming the lower court’s judgment for the University, the court noted that Dr. Yuan failed to follow the University’s protocol for reporting research misconduct claims. The court also found that Dr. Yuan had been unable to demonstrate that federal provisions regarding research misconduct constitute a clear public policy to support a tort claim for wrongful termination of employment. The court observed that the “scientific institution, not this Court, is in the best position and has the expertise to determine whether the research results of its employees amount to impermissible research misconduct.” Therefore, the court concluded that the research misconduct regulations lack clarity as to what constitutes a violation, leaving the court “at a loss to determine what the contours of a wrongful termination claim based on reporting research misconduct would be.” The court therefore held that the research misconduct provisions fail to provide a clear public policy to support a tort claim for wrongful termination of employment. Regarding Dr. Yuan’s claim that the University improperly denied him access to his research materials and records after his termination from employment there, the court, in reviewing the University’s policy on retention of research data, found that it unequivocally states that the University owns all research data generated by projects conducted under the auspices of the University.  Additionally, although the policy provides for instances when researchers may receive permission to take such research materials with them upon leaving employment at the University, the policy did not guarantee such access. Therefore, the court held that under the University’s policy, the University retained ownership of the research materials, and thus acted in accordance with its policy by denying Dr. Yuan’s access to such materials.

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Bruce Luchansky Apr 17 No Comments

Maryland Federal Court Reinforces View Regarding Disability Accommodations in Employment

In Townes v. Md. Dep’t of Juvenile Svcs., the plaintiff alleged that her employer, the Maryland Department of Juvenile Services, violated her rights under the Maryland Fair Employment Practices Act (“MFEPA”), by not providing a reasonable accommodation for her disability. The Law It is an unlawful employment practice in Maryland for an employer to “fail or refuse to make a reasonable accommodation for the known disability of an otherwise qualified employee.” Md. Code Ann., State Gov’t § 20-606(a)(4) (LexisNexis 2014). This statutory provision is expanded upon in state regulations, which require that a covered employer (1) Shall make a reasonable accommodation to the known physical or mental limitations of a qualified individual with a disability; (2) Is not required to provide an accommodation, if it demonstrates that the accommodation would impose undue hardship on the operation of its business or program; and (3) May not deny an employment opportunity to a qualified individual with a disability, if the basis for the denial is the need to accommodate the individual’s physical or mental limitations, and this accommodation, if attempted, would be reasonable. COMAR 14.03.02.05(A). Further, the regulations indicate that an employer commits an unlawful employment practice if it fails to make an individualized assessment of a qualified individual with a disability’s ability to perform the essential functions of a job, unless the qualification standard, employment test, or other selection criteria under which the individual was disqualified meet the requirements of a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the particular business or program. COMAR 14.03.02.04(B)(3). The Maryland Court of Appeals has interpreted the latter provision as requiring “action akin to an interactive process to identify a reasonable accommodation,” as is required in federal law, 29 C.F.R. § 1630.2(o)(3), for compliance with the Rehabilitation Act, 29 U.S.C. § 701 et seq., and the Americans with Disabilities Act, 42 U.S.C. § 12112(a) et seq. See Peninsula Reg’l Med. Ctr. v. Adkins, 137 A.3d 211, 220 (Md. 2016). Thus, the “individualized assessment” required by COMAR 14.03.02.04(B)(3) should be similar to what federal law requires: the employer is to “initiate an informal, interactive process with the individual with a disability in need of the accommodation” to identify a reasonable accommodation. Adkins, 137 A.3d at 219 (quoting 29 C.F.R. § 1630.2(o)(3)).  The Facts The plaintiff was diagnosed with bipolar disorder in January 2012.  Between September 2012 and April 2013 the plaintiff’s bipolar disorder was exacerbated by work-related stress.  On March 27, 2013, plaintiff was provided a doctor’s note indicating that she was medically unable to work and that her condition would be reevaluated in two weeks.  On April 4, 2013, plaintiff’s doctor completed a Leave Bank medical request form, indicating plaintiff could work in a modified capacity and stating, “She needs an office with a less than 30 minute commute somewhere other than the current office where there is an allegation of a hostile work environment.”  The next day, plaintiff’s doctor wrote the Department’s Human Resources office, saying, “Once the job modifications I recommended are implemented I believe Ms. Townes can return to work full duties. I believe when implemented she will be ready for full duties by May 6th, 2013.” The Plaintiff’s doctor concluded she was medically unable to work because of the combination of bipolar disorder and the adjustment disorder; the date of disability began March 22, 2013, and he did not anticipate her return until at least May 6, 2013. The Regional Director for Baltimore City Region, Dwain Johnson, testified that several positions were open in Baltimore City during the relevant time period. Plaintiff’s doctor made an additional request for reasonable accommodations on July 1, 2013, indicating in addition to his earlier requested accommodations that “community casework that requires her to drive from place to place is too stressful . . . and that she therefore, needs to work in a school or intake so that she won’t be traveling from place to place”; he also indicated it is medically necessary for her to work the day shift. The Department requested Townes submit to an independent psychological evaluation, which was completed on August 26, 2013. Approximately one week later, Robert Toney, M.D., completed a “follow-up workability evaluation” in which he indicated Dr. Ballard had concluded “that Ms. Townes was unable to effectively perform her job duties with or without reasonable accommodations.” Plaintiff’s doctor reviewed the list of job vacancies in 2013 when he had requested reasonable accommodations for Townes, and he opined she could have filled several of these positions, including the one in Intake in Baltimore City.  He believed these positions met the restriction on driving distance and also noted they were positions she successfully performed in the past. Other than receiving a Task Analysis form to complete and return to the Department, plaintiff’s doctor was never contacted by anyone at the Department to ascertain what he meant by the particular accommodations he requested for Townes. With no other option available to her, Townes took disability retirement effective October 1, 2013. Court’s Conclusion From this evidence, the Court concluded a genuine dispute of material fact existed as to whether the Department engaged in the necessary, interactive process to conduct an individualized assessment of Townes’s ability to perform the duties required of a job, not necessarily the job she held, which necessitated her cross-state travel and which seems to have been the only job considered by the Department in response to her request for reasonable accommodation.  The Court further noted that a dispute existed as to whether Townes could have been reasonably accommodated by transfer to another position. For those reasons, the court allowed this claim to proceed to trial. 

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Bruce Luchansky Apr 1 No Comments

Federal Appeals Court Allows Homosexual Employee’s Discrimination Claim

Overview Plaintiff Matthew Christiansen filed suit against his employer under Title VII of the Civil Rights Act of 1964 alleging that he was subjected to various forms of workplace discrimination due to his failure to conform to gender stereotypes.  The United States District Court for the Southern District of New York construed Christiansen’s Title VII claim as an impermissible sexual orientation discrimination claim and dismissed it.  Christiansen appealed, and the Federal Appeals Court held that Christiansen’s complaint plausibly alleged a gender stereotyping claim. The Facts Christiansen, an openly gay man who is HIV-positive, worked as an associate creative director and later creative director at DDB Worldwide Communications Group, Inc., an international advertising agency.  Christiansen’s complaint alleged that his direct supervisor engaged in a pattern of humiliating harassment targeting his effeminacy and sexual orientation.  According to Christiansen, in the spring and summer of 2011, his supervisor drew multiple sexually suggestive and explicit drawings of Christiansen on an office whiteboard.  The most graphic of the images depicted a naked, muscular Christiansen, holding a manual air pump and accompanied by a text bubble reading, “I’m so pumped for marriage equality.”  Another depicted Christiansen in tights and a low-cut shirt “prancing around.”  A third depicted Christiansen’s torso on the body of “a four legged animal with a tail and male member, urinating and defecating.”  Later in 2011, Christiansen’ s supervisor circulated at work and posted to Facebook a “Muscle Beach Party” poster that depicted various employees’ heads on the bodies of people in beach attire.  Christiansen’s head was attached to a female body clad in a bikini, lying on the ground with her legs upright in the air in a manner that one coworker thought depicted Christiansen as “a submissive sissy.”  Christiansen’s supervisor also made remarks about the connection between effeminacy, sexual orientation, and HIV status.  The supervisor allegedly told other employees that Christiansen “was effeminate and gay so he must have AIDS.”  Additionally, in May 2013, in a meeting of about 20 people, the supervisor allegedly told everyone in the room that he felt sick and then said to Christiansen, “It feels like I have AIDS. Sorry, you know what that’s like.”  At that time, Christiansen kept private the fact that he was HIV-positive.   District Court Litigation and Decision Christiansen filed suit in the United States District Court for the Southern District of New York and  defendants moved to dismiss the complaint.  In their motion to dismiss, defendants argued that Christiansen’s claim under Title VII was a sexual orientation discrimination claim rather than a gender stereotyping claim and was thus not cognizable under the applicable precedent. The district court agreed.   In its decision, the district court described at length difficulties in distinguishing sexual orientation discrimination claims from gender stereotyping claims, specifically noting that negative views people hold of those with certain sexual orientations may be based on stereotypes about appropriate romantic associations between men and women.   The district court concluded that no coherent line can be drawn between these two sorts of claims.  Nevertheless, the district court recognized that the prevailing law in the Second Circuit—and, indeed, every Circuit to consider the question—is that such a line must be drawn.   Although the district court considered several references to effeminacy in the complaint, it concluded that, as a whole, Christiansen’s complaint did not allege that he was discriminated against because he did not conform to gender stereotypes, but because he was gay.   As a result, the district court held that Christiansen’s claim was a sexual orientation discrimination claim that was not cognizable under Title VII pursuant to Second Circuit precedent and dismissed the claim. Christiansen appealed the decision to the United States Court of Appeals for the Second Circuit.   Appeal The appeals court disagreed with the district court’s and held that the gender stereotyping allegations in Christiansen’s complaint were cognizable under the United States Supreme Court and Second Circuit precedents. The Court noted that Christiansen alleged that he was perceived by his supervisor as effeminate and submissive and that he was harassed for these reasons.  Furthermore, the harassment to which he was subjected, particularly the “Muscle Beach Party” poster, is alleged to have specifically invoked these “stereotypically feminine” traits.   The appeals court rejected the district court’s comment that much more of the complaint was devoted to sexual orientation discrimination allegations than gender stereotyping discrimination allegations and that it thus might be difficult for Christiansen to withstand summary judgment or prove at trial that he was harassed because of his perceived effeminacy and flouting of gender stereotypes rather than because of his sexual orientation. The appeals court stated that even if that were Christiansen’s burden at summary judgment or at trial it is not the courts’ task at the motion to dismiss stage to weigh the evidence and evaluate the likelihood that Christiansen would prevail on his Title VII gender stereotyping claim.  Instead, the courts must assess whether he has stated a claim to relief that is plausible on its face.  

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Bruce Luchansky Mar 31 No Comments

Employer Successfully Defeats FMLA Interference Claim

In Quigley v. Meritus Health, Inc., in the Federal District Court in Maryland, an employer successfully defeated an ex-employee’s claim for FMLA interference.   The Facts Plaintiff Margaret Quigley worked as an ultrasound technician at Meritus Medical Center (“the Hospital”). The Hospital is a level-three trauma center and is required to have ultrasound coverage available on a 24/7 basis.  From 2008 until December 2011, Ms. Quigley worked the weekend night shift exclusively.  She was the only sonographer with such a permanent shift: all other sonographers rotated between day shifts, evening shifts, and those night shifts that Ms. Quigley did not work.   When Ms. Quigley was on FMLA leave in 2012, the Hospital changed her shift by implementing a universal rotating shift schedule, meaning that all sonographers — including Ms. Quigley — would rotate between day shifts, evening shifts, and night shifts.  Although this change affected all sonographers, it most dramatically affected Ms. Quigley, who was the only technician not already on a rotating schedule.   Ms. Quigley learned of this change by May 24, 2012, while she was still on leave and shortly before she was to return to work on May 30, 2012.  After learning of it, Ms. Quigley objected, and did not return to work.  She was then separated from employment effective June 4, 2012. The Court credited the explanation offered by the Hospital of how the universal rotating schedule was developed and implemented.  The impetus for the schedule dated back at least to November 25, 2011, when the Hospital failed to secure night-shift ultrasound coverage after the plaintiff called out sick and did not come to work that evening.  In response, defendant Sherry Mace, the manager of the imaging department, began contemplating a move to a universal rotating schedule, which in her view would make it easier to ensure coverage in case of last-minute call outs.  She discussed this possibility with her superiors in December 2011.   By January 2012, Ms. Mace had decided to implement this change.  After consulting with defendant Chris Bumbaugh, the director of human resources, about the proposed change in January 2012, Ms. Mace invited all sonographers to a meeting on February 2, 2012, to discuss the universal rotating schedule.  The Hospital then implemented the new schedule in March 2012, while Ms. Quigley was on leave. Ms. Quigley, who worked on February 2, 2012, but did not attend the meeting, was on FMLA leave from March 7, 2012, through May 28, 2012.  She claimed she only learned of the change to a universal rotating schedule in May 2012, shortly before she was scheduled to return to work.   The Court’s Legal Analysis The Court first cited the elements of establishing an FMLA interference claim: An employee must prove that (1) she was an eligible employee; (2) her employer was covered by the FMLA; (3) she was entitled to leave under the FMLA; (4) she gave her employer adequate notice of her intention to take leave; and (5) the employer denied her FMLA benefits to which she was entitled. The Court noted that this case centered on the fifth prong and continued to cite relevant cases and regulations explaining and applying the law, which we paraphrase immediately below. Upon return from FMLA leave, an employee is generally entitled to be restored to the same position held when the leave commenced or its equivalent.  With respect to work schedules in particular, an employee is ordinarily entitled to return to the same shift or the same or an equivalent work schedule. On the other hand, the right to restoration is not absolute.  A returning employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period. Accordingly, an employer may deny restoration to a previous position or its equivalent for legitimate business reasons that are unrelated to the exercise of FMLA rights. FMLA claims concerning restoration to the same or an equivalent position often fail if the evidence tends to show that the employer made the employment decision prior to the request for FMLA leave, especially when coupled with other evidence supporting the proffered reason for the decision.  In addition, an employment decision may be legitimate — and thus preclude FMLA liability — even if it affects only one employee, and it is more likely to be legitimate if the employee had been restored to the same position after taking FMLA leave on several prior occasions.    The Court’s Decision The Court held that, even assuming Ms. Quigley was not offered the same position or its equivalent upon her expected return from FMLA leave in May 2012, the evidence showed the Hospital had legitimate business reasons for moving all technicians to a rotating shift schedule.  The evidence also showed the Hospital had decided to put all technicians on a rotating schedule at least by the end of January 2012 — before Ms. Quigley notified the Hospital she would take FMLA leave to recover from foot surgery.  Accordingly, the Court concluded that Ms. Quigley would have been required to join all other technicians on a rotating schedule even if she had not taken FMLA leave in March, April, and May 2012. Although the new schedule most dramatically affected Ms. Quigley, it affected all technicians to some degree and, in any event, legitimate business decisions may affect only one employee.  The evidence thus demonstrated that no FMLA violation occurred.  That conclusion was bolstered by the fact that the Hospital granted Ms. Quigley FMLA leave every time she requested it and had restored her to a permanent night shift after previous absences. Ms. Quigley, by contrast, offered no credible evidence rebutting the assertion that a universal rotating schedule served a legitimate business need, because it would help the Hospital secure coverage in case of last-minute call outs and also, as Ms. Mace testified, ensure that all sonographers were familiar with the particular demands of the night shift.  She also was unable to show that the

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Bruce Luchansky Mar 2 No Comments

United States Court of Appeals’ New FLSA Test: Part 2

On the same day that the United States Court of Appeals for the Fourth Circuit issued the Salinas opinion in our previous post, the Court also issued the following opinion further clarifying and applying the new test. In Hall, et al. v. Albrecht, et al., No. 15-1857 (4th Cir. Jan. 25, 2017), Plaintiffs, satellite television technicians, alleged that DIRECTV and DirectSat, through a web of agreements with various affiliated and unaffiliated service providers, jointly employed Plaintiffs, and therefore were jointly and severally liable for any violations of the FLSA’s substantive provisions.  The Court of Appeals stated that, in determining whether the relationship between two entities gives rise to joint employment, the District Courts should consider the following six, non-exhaustive factors: (1) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the ability to direct, control, or supervise the worker, whether by direct or indirect means; (2) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to— directly or indirectly—hire or fire the worker or modify the terms or conditions of the worker’s employment; (3) The degree of permanency and duration of the relationship between the putative joint employers; (4) Whether through shared management or a direct or indirect ownership interest, one putative joint employer controls, is controlled by, or is under common control with the other putative joint employer; (5) Whether the work is performed on a premises owned or controlled by one or more of the putative joint employers, independently or in connection with one another; and (6) Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate responsibility over functions ordinarily carried out by an employer, such as handling payroll; providing workers’ compensation insurance; paying payroll taxes; or providing the facilities, equipment, tools, or materials necessary to complete the work. In applying the test, the Court found that the alleged joint employer Defendants instituted and operated a fissured employment scheme, governed by a web of provider agreements, that endured throughout Plaintiffs’ periods of employment as DIRECTV technicians and was essential to the installation and repair of DIRECTV’s own products. DIRECTV was the principal—and, in many cases, only—client of the lower-level subcontractors, and DIRECTV often infused capital into or formally “absorbed” the subcontractors when necessary.   Moreover, DIRECTV and DirectSat allocated, through provider agreements with one another and with subcontractors, the authority to direct, control, and supervise nearly every aspect of Plaintiffs’ day-to-day job duties. DIRECTV, DirectSat, and other subcontractors shared authority over hiring, firing, and compensation. Although Plaintiffs’ direct employers had formal firing authority, DIRECTV used its centralized work-assignment system to effectively terminate technicians by ceasing to assign them work.  DIRECTV and members of its Provider Network also shared authority over technicians’ compensation.  TAKEAWAY: Employers must ensure that they are in compliance with this new FLSA test governing joint and several liability. Routine audits are the only effective way employers can remain FLSA compliant and minimize their exposure to costly litigation. In addition to compliance audits and counsel, the employment attorneys at Luchansky Law are experienced litigators.  If you are in need of counsel or litigation representation, contact our firm today. 

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Bruce Luchansky Jan 27 No Comments

United States Court of Appeals’ New FLSA Test: Part 1

In Salinas, et al. v. Commercial Interiors, Inc., No. 15-1915 (4th Cir. Jan. 25, 2017), the United States Court of Appeals for the Fourth Circuit issued a new test for determining a “joint employer” under the FLSA. FACTS J.I. General Contractors, Inc. (“J.I.”), a now-defunct framing and drywall installation subcontractor, directly employed Plaintiffs as drywall installers.  During its existence, J.I.—and therefore Plaintiffs—worked almost exclusively for Commercial Interiors, Inc. (“Commercial”), a company offering general contracting and interior finishing services, including drywall installation, carpentry, framing, and hardware installation. LAWSUIT Plaintiffs sued J.I. – its owners personally – and Commercial for violations of the Fair Labor Standards Act (“FLSA”); the Maryland Wage and Hour Law; and the Maryland Wage Payment and Collection Law. According to the complaint, Commercial and J.I. jointly employed Plaintiffs, (1) requiring aggregation of Plaintiffs’ hours worked for Commercial and J.I. to assess compliance with the FLSA and Maryland law and (2) rendering Commercial and J.I. jointly and severally liable for any violations of the statutes. The United States District Court of Maryland granted summary judgment to Commercial, holding that Commercial did not jointly employ Plaintiffs because J.I. and Commercial entered into a “traditionally . . . recognized,” legitimate contractor-subcontractor relationship and did not intend to avoid compliance with the FLSA or Maryland law. APPEAL On appeal, the United States Court of Appeals for the Fourth Circuit held that the legitimacy of a business relationship between putative joint employers and the putative joint employers’ good faith are not dispositive of whether entities constitute joint employers for purposes of the FLSA. The Court explained that joint employment exists when (1) two or more persons or entities share, agree to allocate responsibility for, or otherwise codetermine—formally or informally, directly or indirectly—the essential terms and conditions of a worker’s employment and (2) the two entities’ combined influence over the essential terms and conditions of the worker’s employment render the worker an employee as opposed to an independent contractor. Applying the test, the Court concluded, based on the undisputed facts, that Commercial jointly employed Plaintiffs for purposes of the FLSA and the analogous Maryland law. On the same day the Court issued this opinion, the Court issued another similar opinion that further clarifies and applies the new test, as our next post will explain.

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Bruce Luchansky Jan 26 No Comments

District of Columbia Passes Expansive Paid Leave Bill

Yesterday, the Washington, D.C., City Council passed groundbreaking legislation that would create one of the most generous paid family and medical leave programs in the United States. The Universal Paid Leave Amendment Act of 2016 (Bill 21-415), would provide private-sector employees eight weeks of paid leave after the birth or adoption of a child. It would also provide two weeks of sick leave for the employee’s own illness and six weeks of paid leave to care for a family member.  The Act would apply to all private employers in Washington, DC, regardless of size. It also covers all employees who spend at least 50% of their working time in DC, regardless of the number of hours they work each year, and will also dramatically expand the number of employees entitled to family and medical leave benefits. Paid leave benefits will be made available through a public fund administered by the DC government and funded by a payroll tax equal to 0.62% of each covered employee’s annual wages. This legislation was controversial since critics argued that the law will primarily benefit Maryland and Virginia residents who work in DC, while causing businesses to seek to move employees into their Maryland and Virginia offices. DC Mayor Muriel Bowser, who has long opposed the bill, released a statement confirming that she would not sign the legislation but did not indicate whether she would veto it. Should the mayor veto the bill, the council’s vote margin is enough to override it. If the bill becomes law, it would be sent to Congress for approval, like all District laws. It will be several years before the payroll tax authorized by the Universal Paid Leave Amendment Act of 2016 will be assessed against employers and even longer until covered employees will be able to claim benefits.  

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Bruce Luchansky Dec 21 No Comments

Employers Must Begin Using Revised I-9 Form

The U.S. Citizenship and Immigration Services (USCIS) Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States. This past November, the USCIS published a revised I-9 that employers must begin using January 22, 2017.  The new version is dated 11/14/2016.  Until then, employers can continue to use the old version or the new version. The new version includes the following changes: The addition of prompts to ensure information is entered correctly. The ability to enter multiple preparers and translators. A dedicated area for including additional information rather than having to add it in the margins. A supplemental page for the preparer/translator. The instructions have been separated from the form and include specific instructions for completing each field. The revised I-9 is also easier to complete on a computer. Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over. When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers.

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Bruce Luchansky Dec 7 No Comments

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