corporate labor and employment law exclusive …perspectives compass april 2019 edition p4 top tips...
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2019 CORPORATE LABOR AND EMPLOYMENT COUNSEL EXCLUSIVE
OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 33-1
POP QUIZ
CORPORATE LABOR AND EMPLOYMENT
LAW EXCLUSIVE STYLE
Joseph L. Beachboard (Moderator) – Ogletree Deakins (Torrance)
Rodolfo R. (Fito) Agraz (Dallas/Raleigh) • Melissa A. Bailey (Washington, D.C.)
Dr. Ulrike Conradi (Berlin) • M. Kimberly Hodges (Memphis/Jackson)
Christopher E. Moore (New Orleans/Houston)
Jimmy F. Robinson, Jr. (Richmond) • Charles L. Thompson, IV (San Francisco)
Vince M. Verde (Orange County)
Employment Law
I Hate My Boss: Sixth Circuit Shuts DownADA Request for Less Stressful Boss
April 11, 2019
T he Sixth Circuit Court of Appeals recently reminded employers that, even
under the more liberal standard for establishing a disabili� under the
Americans with Disabilities Act Amendments Act of ���� (ADAAA), an employee
who claims he or she cannot perform the major life activi� of “working” has to do
more than prove a substantial limitation in working in a single specific job. �e
employee must prove his or her impairment limits the abili� to perform “a class of
jobs or a broad range of jobs.”
Tinsley v. Caterpillar Financial Services, Corp. (� Cir. March ��, ����), was filed by a
worker who was diagnosed with post-traumatic stress disorder (PTSD). She claimed
she was impaired in performing her job as a business system analyst because of her
supervisor’s management s�le. She admi�ed she could remain in her position and
perform her job duties, but only if the company assigned her to another manager.
Background
Cindy Tinsley worked for Caterpillar for �� years. From the record, it appears she
didn’t run into any issues until ����, when she reported experiencing work-related
stress that was impacting her work, sleep, and overall health. Tinsley took leave
under the Family and Medical Leave Act (FMLA) and, when she returned, she met
with her team leader and her manager, who redistributed some of her work to
coworkers and took other measures to reduce Tinsley’s stress level. When Tinsley’s
work still did not improve, management gave her a “not meeting expectations”
performance review and put her on a performance improvement plan. During a
meeting with her manager, Tinsley complained about her coworkers bouncing stress
balls on their o�ce floors, which she called “horseplay.” She claimed that her
manager’s demeanor toward her changed a�er she complained about her coworkers’
activities.
Tinsley took another leave of absence a�er which her doctor approved her to return
to work without restrictions, but “strongly recommended her working in a di�erent
work environment and specifically under a di�erent manager.” Tinsley told human
resources personnel that she could continue to work in the same position as long as
she reported to a di�erent manager with whom she was more familiar. �e company
denied Tinsley’s request for another supervisor but granted her another leave of
absence, which eventually exceeded her FMLA leave allotment. Tinsley filed a
charge of discrimination with the Tennessee Human Rights Commission and
continued to request reassignment to another supervisor. Caterpillar responded that
it did not believe her request for transfer to another supervisor was a reasonable
accommodation and directed her to return to work. She retired and claimed
constructive discharge.
th
Ellen Toth
Cleveland
Author
Sixth Circuit’s Ruling
In a�rming summary judgment in favor of Caterpillar on Tinsley’s ADA claim, the
court relied on the plainti�’s representation that the only reason she could not
perform her job was her manager’s specific management s�le. Relying on case law
and the Equal Employment Opportuni� Commission’s interpretive guide, the court
ruled that a plainti� who argues that he or she is substantially limited in the major
life activi� of working but does not prove he or she was substantially limited in
performing “either a class of jobs or broad range of jobs in various classes” is not
eligible for ADA relief.
�e court reversed the district court’s order granting summary judgment to
Caterpillar on her retaliation claim, which was based on her negative performance
review and performance improvement plan and remanded. Because there was only a
two-month lapse in time between the performance evaluation/improvement plan
and her taking FMLA leave, the court remanded the case for Caterpillar to have an
opportuni� to articulate a legitimate, non-discriminatory reason for its adverse
employment actions against Tinsley.
Employment Law, Leaves of Absence
First Circuit Rules Inconsistent SSDIStatements Doom ADA Claim
August 27, 2019
I n Pena v. Honeywell International, Inc., issued on July ��, ����, the U.S. Court of
Appeals for the First Circuit denied a former employee’s petition for rehearing en
banc of the court’s April ��, ����, decision addressing whether her inconsistent
statements on her Social Securi� Disabili� Insurance (SSDI) benefits application and
complaint precluded her from bringing a claim pursuant to the Americans with
Disabilities Act (ADA). Specifically, in applying for SSDI benefits, Pena, the former
employee, had consistently asserted that she was totally disabled as of the last date
she worked at Honeywell. However, in her complaint against Honeywell, Pena alleged
that she was a qualified individual with a disabili� and thus able to perform the
essential functions of the job, with or without an accommodation. Because Pena
failed to explain these inconsistencies, the court held that her ADA claims against
Honeywell were precluded by the doctrine of judicial estoppel.
Background
Honeywell determined that all of its production and assembly-line employees should
be cross-trained in various departments. Pena, who regularly worked in the
respiratory department, was therea�er required to cross-train in the molding
department, among other areas of the facili�. Prior to and a�er Honeywell’s decision
to have employees cross-train, Pena took several medical leaves due to her depression
and anxie�. A�er the decision, she began working in the molding department for
several hours a week, and spent the remainder of her time working in the respiratory
department. Shortly therea�er, Pena complained that working in the molding
department was “harmful to [her] emotionally.” She also provided a doctor’s note
stating that Pena had reported that working in the molding room had exacerbated
her anxie�. Without more information, Honeywell was unable to substantiate Pena’s
complaint and informed her that if she refused to work in the molding department,
she would have to go home. On March �, ����, Pena le� work and never returned.
A�er she le� work, Pena clarified that the “noise, speed, and overall environment [of
the molding department] gives [her] anxie�, palpitations.” �e company therea�er
exchanged multiple correspondences with her a�orney and received several notes
from her doctor explaining, among other things, that the “noise levels, chemical
odors, and the presence of robotics” in the molding department made it particularly
stressful for Pena. On May ��, ����, Honeywell wrote to Pena’s a�orney again
stating that her doctor’s notes did not explain the connection between her medical
diagnosis and her abili� to work in the molding department, given that the items
identified by her doctor were also true of working conditions in other departments,
including the respiratory department where Pena regularly worked. �e le�er also
explained that the respiratory department would remain Pena’s primary department,
Katherine G. Rigby
Boston
Author
Alexandra R. Hassell
Boston
Author
but that all employees would be rotating among all areas of the facili�, not just the
molding department. Moreover, the rotations would be “as brief as �� minutes, or as
long as one week.” Pena’s a�orney did not respond to this le�er.
On June ��, ����, a�er Pena had been absent for more than three months and used
all of her medical leave, the company terminated her due to job abandonment.
Approximately two months later, she applied for SSDI benefits. On her application,
she claimed that she was totally disabled as of the last date that she worked at
Honeywell by stating, “I became unable to work because of my disabling condition
on March �, ����,” and “I am still disabled.”
�e Court’s Analysis
On April ��, ����, Pena filed a complaint in Rhode Island Superior Court (the civil
action was subsequently removed to the U.S. District Court for the District of Rhode
Island) alleging that the company had violated the ADA and state law. �e district
court granted the company’s motion for summary judgment, holding that Pena’s
claims were precluded by judicial estoppel due to her inconsistent statements on her
SSDI application. �e doctrine of judicial estoppel prevents a par� from taking a
position in one proceeding that contradicts the position it took in an earlier
proceeding. Pena appealed the district court’s decision to the First Circuit, arguing
that being disabled under the ADA is distinguishable from being disabled for the
purpose of quali�ing for SSDI benefits, as the ADA considers reasonable
accommodations. On April ��, ����, the First Circuit a�rmed the district court’s
decision, noting that Pena had provided “no qualification of any sort to her
statement that she was totally disabled as of March �, ����.” (Pena v. Honeywell
International, Inc., ��� F.�d �� (�st Cir. ����)). Specifically, at her deposition, Pena had
failed to explain the discrepancies between her claims made in the ADA litigation
and in her SSDI application, and instead reinforced the discrepancies. Additionally,
Pena subsequently submi�ed a self-serving a�davit in an a�empt to minimize her
deposition testimony. �e court declined to consider the a�davit, as it was an
improper method of creating a genuine issue of a material fact.
Pena filed a petition for rehearing en banc with the First Circuit, which the court
denied for the aforementioned reasons.
Key Takeaways
�e court expressly stated that its order denying the petition for rehearing en banc
“does not foreclose di�erent successful SSDI beneficiaries from filing ADA claims,
provided they reconcile any di�erences in their positions …” (emphasis added). �e court’s
decision highlights the importance of obtaining all documents and evidence related
to a plainti�’s statements, correspondence, disabili� applications, etc., to determine if
the plainti� has made inconsistent assertions regarding his or her disabili�. At the
same time, employers are wise to engage in the interactive process with employees
who have applied for SSDI benefits regardless of statements made on their SSDI
applications, as they may be entitled to bring ADA claims if they can adequately
explain discrepancies during ensuing litigation.
California, State Developments
California Bill Would Expand Definition ofRace to Include Hairs�le
April 8, 2019
C alifornia Senate Bill (SB) ��� seeks to provide a broader definition of “race”
in California’s anti-discrimination law. �e bill defines “race” as “inclusive of
traits historically associated with race, including, but not limited to, hair texture and
protective hairs�les.” �e bill is expected to become law, and employers may want to
plan accordingly.
�e Equal Employment Opportuni� Commission (EEOC) has long held that the
meaning of “race” is not limited to skin color. Color discrimination is itself a
protected category, which can be defined as discrimination based on pigmentation,
complexion, or skin shade or tone. “Race” has a broader meaning and can include
physical characteristics associated with race (such as a person’s hair, facial features,
and height and weight), as well as cultural characteristics related to race (including a
person’s name, cultural dress and grooming practices, or accent or manner of
speech).
Recently, the New York Ci� Commission on Human Rights released new guidance
regarding the application of the New York Ci� Human Rights Law to situations
involving characteristics and cultural practices closely associated with race. �e
commission focused in particular on discrimination against hair texture and
hairs�les associated with being Black because of the frequency of such
discrimination. �e commission explained that “[r]ace discrimination based on hair
and hairs�les most closely associated with Black people has caused significant
physical and psychological harm to those who wish to maintain natural hair or
specific hairs�les but are forced to choose between their livelihood or education and
their cultural identi� and/or hair health.” California’s SB ��� further reflects this
development in civil rights law.
SB ��� makes a series of findings and declarations, including that discrimination
against “‘blackness,’ and the associated physical traits” is pervasive in socie� and has
“permeated societal understanding of professionalism.” �e bill states that this
“Eurocentric image of professionalism . . . disparately impact[s] Black individuals.”
Accordingly, the bill expressly includes protections of traits historically associated
with race, including protective hairs�les such as braids, locks, and twists.
Key Takeaways for Employers
California employers are likely to see this new standard become law, so they may
want to consider taking steps to ensure that their discrimination and harassment
prevention programs, as well as their grooming policies, comply with this new
standard. For example, companies could train management that the following
policies and practices would likely violate the standards set forth in SB ���:
Michael J. Nader
Sacramento
Author
Having a grooming policy that prohibits twists, locks, braids, cornrows, Afros,
Bantu knots, or fades—all of which are commonly associated with Black people
Having a grooming policy that requires employees to alter the state of their hair
to conform to the company’s appearance standards, including a policy that
requires employees to straighten or relax hair (which involves the use of
chemicals or heat)
Having a grooming policy that bans hair that extends a certain number of
inches from the scalp, thereby limiting Afros
Having a grooming policy that requires “professional hair” or “clean and tidy
hair” but is applied to mean that employees cannot wear Afros, locks, twists, or
braids
Forcing Black people to obtain management approval prior to changing
hairs�les but not imposing the same requirement on other people
Requiring only Black employees to alter or cut their hair or risk losing their jobs
Telling Black employees with locks that they cannot be in a customer facing
role unless they change their hairs�le
Refusing to hire a Black applicant with cornrows because his or her hairs�le
does not fit the image the company is trying to project to customers
Mandating that Black employees hide their hair or hairs�le with a hat or visor
Instead, employers may want to consider adopting the following policies and
practices:
Adopting a grooming policy based on rules that are valid, nondiscriminatory,
have no disparate impact, and are uniformly applied
For example, the policy may include a race-neutral rule requiring employees
to keep their hair neat and clean.
Similarly, a company could adopt a rule requiring all employees to secure
their hair for bona fide safe� or hygienic reasons.
Revising discrimination and harassment prevention policies to broadly define
race to include physical and cultural characteristics associated with race
Supplementing harassment prevention training programs with hypotheticals
that further illustrate the broad meaning of race-based harassment and
discrimination
�ese examples may include, as the EEOC has explained, unfair height and
weight standards that have an adverse impact on Asian Americans and
hairs�ling rules that have an adverse impact on Black women.
Emphasizing that a respectful workplace does not condone teasing or joking
about traits that have historically been associated with one’s race or ethnic
identi� in harassment prevention trainings
California, Class Action, State Developments, Wage and Hour
California Class Action Highlights How toManage an Overtime Policy
September 4, 2018
H ow can a company manage its overtime policy in compliance with California
law? A recent decision by a federal district court in California certified a
class action involving claims of unpaid overtime, and the court’s reasoning shows
what factors employers may want to consider—and to avoid—when designing an
overtime policy. In Shaw v. AMN Healthcare, Inc., a putative class of traveling nurses
(employed by a labor contractor, AMN Healthcare, Inc., that recruits and places
traveling nurses at healthcare facilities nationwide) claimed that they were not paid
for overtime when they worked at Kaiser hospitals in California. �e court certified
the class action, finding that the plainti�s met the commonali� and predominance
requirements as to their overtime claims.
�e Court’s Analysis
�e judge emphasized that California law requires employers to compensate
employees for all time they are “su�ered or permi�ed to work, whether or not
required to do so.” As such, it is the du� of management to “make every e�ort” to
enforce a rule against uncompensated work, including “tak[ing] reasonable steps to
investigate” suspected work that is done without compensation. Employers cannot
“sit[] back” or “stand[] idly by” while employees do uncompensated work.
In reviewing the facts, the judge found that common policies and communications
were sent to traveling nurses that conveyed to them that Kaiser has a “strict policy
against overtime.” Handbook policies at some facilities expressly stated that overtime
is not authorized. Other policies provided an approval process for overtime that the
plainti�s claimed was too burdensome because it required the preapproval and
signatures of two di�erent managers. Some plainti�s testified that they were
exhausted a�er a ��-hour shi� and that “it was o�en an ‘impossible task’ to track
down a manager or charge nurse to authorize overtime.”
�e court also found that Kaiser requires all of its nurses (its own nurses as well as
the traveling nurses) to perform the same core duties and requires that they uphold
the same ethical and professional obligations with respect to patient care. However,
the court noted that Kaiser’s overtime policy for its own nurses permits them to
work up to two hours of overtime each week without supervisor approval, while
travel nurses must be preauthorized for any overtime. �e court cautioned that this
situation could evidence a “structural problem” of failing to pay overtime to traveling
nurses, giving employers of such nurses something to analyze and consider.
Key Takeaways
�ere are many steps a company may want to consider taking to manage overtime
within the requirements of California law, including the following:
Michael J. Nader
Sacramento
Author
Instead of designing a policy that prohibits overtime, an employer may want to
consider dra�ing a policy that permits overtime based on the preauthorization
of a supervisor.
Consider adopting a preauthorization requirement that is less burdensome than
requiring employees to obtain signed forms prior to working overtime, such as
requiring verbal authorization of overtime and then documentation the
following day by the supervisor.
Employers may want to apply similar overtime policies to similar categories of
employees.
An employer can expressly require employees to record all hours worked,
including overtime that was not approved in advance as required by the policy.
Employers may want to require employees to sign their time sheets to a�est
that they are accurate and complete and that they include all time worked,
including any overtime, whether or not it was preauthorized.
Another su�estion is to require employees to a�est that they were provided
their du�-free meal breaks and that they took their breaks. Plainti�s o�en raise
overtime claims based on allegations that they were required to work through
their meal breaks, and thus when they clock out at the end of their regular �-
hour shi�, they claim to have worked �� minutes of overtime. Ensuring the
provision of du�-free meal breaks can prevent such overtime claims.
Employers may want to noti� employees that the underreporting of time
worked and working o�-the-clock are violations of company policy and may
lead to the termination of employment.
An employer can encourage employees to carefully review their records of time
worked, earnings statements, pay stubs, direct deposit statements, and
paychecks to ensure that they are accurate and correct and to immediately
report any discrepancies to human resources (HR).
Consider reminding employees in writing that no manager or supervisor has
the authori� to require, encourage, su�est, or permit an employee to work o�-
the-clock or underreport their hours worked. Also, remind any employee
experiencing such situations to immediately report them to HR.
An employer may want to require employees to immediately report to HR any
concerns about their schedules, time worked, records of overtime worked, or
their pay.
Consider training supervisors that they are prohibited from (a) withholding
overtime pay for any reason, including as a means to enforce a preauthorization
policy; (b) encouraging or coercing employees to misrepresent or underreport
their time worked; or (c) encouraging or coercing employees to work o�-the-
clock.
An employer may want to regularly audit records of overtime paid and any
complaints about the preauthorization process or uncompensated overtime.
Cross-Border, Employee Benefits and Executive Compensation
Tax Treatment of Employer-Provided FringeBenefits for International Assignees
August 3, 2018
T he Internal Revenue Service (IRS) recently clarified its position on two fringe
benefits provided to employees on global assignments: tax equalization
services and tax return preparation services. Memorandum Number ���������
from the IRS’s O�ce of Chief Counsel (OCC), released on March �, ����, concerned
a large American company employing thousands of employees globally.
�is taxpayer and the OCC agreed that tax equalization services were nontaxable
fringe benefits and that the tax preparation services received were taxable benefits.
However, there was disagreement over how to value tax preparation services, as the
returns are o�en complex and such services are not �pically paid for by individual
taxpayers but rather through sizeable agreements that reflect economies of scale. �e
IRS chief counsel’s memo provided guidance on how to ascertain the fair market
value of the services provided to employees by large multinational accounting firms.
A myriad of fringe benefits are o�ered to employees by employers during
international assignments. �ough some benefits are o�ered to enhance the
compensation of today’s global workforce, others are o�ered to ensure that
employees are not detrimentally impacted from a financial perspective due to their
assignments. Other benefits are o�ered to ensure that individual employees’
minimum legal requirements in the home and host locations are satisfied. Two such
fringe benefits are
tax equalization services, which seek to ensure that an employee’s tax burden
due to an assignment is “equal” to what it would have been absent the global
assignment; and
tax preparation services, which seek to ensure that an individual’s tax return
filing obligations are satisfied in both the home and host locations.
�e IRS chief counsel’s memo addressed the following issues:
�. Whether the value of tax equalization services is included in employee income
�. Whether the value of tax preparation services is included in employee income
�. Whether such taxable benefits are subject to income tax withholding
�. Whether such taxable benefits are subject to Federal Insurance Contributions Act
(FICA) tax withholding
�. How taxable benefits are valued
Michael K. Mahoney
Morristown
Author
It should be noted that the main focus of this article is on the United States tax
consequences of fringe benefits received as part of an employee’s global assignment
—particularly the treatment and valuation of tax preparation services. However,
employers should also be aware that there may be tax obligations in the non-United
States jurisdiction.
Tax Equalization and Tax Preparation Process
�e goal of a tax equalization process is to place a global assignee in the same
financial position from a tax perspective that he or she would have been in had the
global assignment not occurred. �at is to say, the assignee should be neither be�er
o� nor worse o� due to the global assignment. In order to ensure such pari�, a
series of calculations are required at di�erent times during the life cycle of a global
assignment.
�e first step requires the calculation of an approximate hypothetical tax at the
beginning of a global assignment based on the assignee’s home country tax
obligations. �is calculation approximates the anticipated taxes an assignee would
face in his or her home country absent the assignment. �is baseline calculation is
then used to reduce the agreed-upon remuneration of the assignee. �at is to say, the
take-home or net pay of the employee is adjusted to account for the taxes that he or
she would have paid if he or she worked exclusively from the home jurisdiction.
Meanwhile, on a per-pay-period basis for the duration of the assignment, the
employer pays actual taxes in home and host locations according to local laws and
regulations. �is results in additional income being imputed to the employee. To
ensure that the additional imputed income does not result in the employee facing
additional outlays for income taxes on his or her personal income tax return, such
amounts are subject to a gross-up, which results in the employer paying taxes on the
taxes paid on the employee’s behalf. If done correctly, the tax impact to the employee
is neutral, neither benefiting nor harming the employee’s finances.
At the end of the tax year, the hypothetical tax is recalculated based on actual
compensation data and personal income tax details. �e actual tax is then subtracted
from the approximate hypothetical tax that was calculated at the beginning of the
year. If the result is positive, the employer will pay the di�erence to the employee
because the net compensation paid over the course of the year was understated. If
the result is negative, the employee will pay the employer because the net pay was
overstated over the course of the year. �is se�lement payment results in the
employee being “equalized” from a tax perspective—that is, neither be�er o� nor
worse o� because of the global assignment. Rather, the net pay impact from taxes is
the same as if the employee had not been stationed away from home.
Separately, tax returns for assignees are prepared according to local requirements in
the home and host locations, accounting for local di�erences in compensation
definitions and the timing of recognition. �is service is beneficial to global
assignees, particularly in host locations where there may be language barriers and a
lack of connections to local tax return preparers. Tax return preparation services
o�en include services to address inquiries from taxing authorities relating to
positions taken on personal tax returns.
�ough the provision of tax equalization services and tax preparation services to
employees on international assignments is undeniably beneficial, the question
remains whether the value of such services is includable in employee income and
subject to wage withholding and reporting.
Working Condition Fringe Benefits
“Gross income” is broadly defined by the Internal Revenue Code (IRC) to include “all
income from whatever sources derived,” including fringe benefits. �us, absent a
statutory exclusion, any fringe benefit provided to an employee by an employer is
considered gross income.
One such statutory exclusion applies to “working condition” fringe benefits, defined
as “any proper� or services provided to an employee of [an] employer to the extent
that, if the employee paid for such proper� or services, [the] payment would be
allowable as a deduction under [Code] section ��� or ���.” In order to be excludable as
a working condition fringe benefit, the employer must derive a substantial business
benefit from the provision of the proper� or services that is distinct from the
benefit that it would derive from the mere payment of additional compensation.
Tax Preparation
�e IRS chief counsel’s memo found that the provision of tax preparation services
confers a direct and personal benefit on the employee, rather than a benefit to the
employer. �at is to say, an employer does not receive a su�cient benefit from
ensuring that an employee completes a tax return for the provision of such services
to be considered ordinary and necessary business expenses. �e IRS chief counsel’s
memo concluded that personal income tax preparation expenses are not excludable
as a working condition fringe benefit because they are not IRC Section ���
expenses.
Tax preparation costs still may be deductible under IRC Section ���, which applies to
expenses incurred for the determination, collection, or refund of any tax. However,
IRC Section ��� expenses are not eligible for exclusion from an employee’s income as
a working condition fringe benefit.
Tax Equalization
On the other hand, the IRS chief counsel’s memo stated that any additional benefit
provided to the assignees in connection with the tax equalization process was
primarily provided for the employer’s benefit and was therefore excludable from the
assignees’ incomes. Employers receive significant benefits from sending employees
on global assignments (such as gaining access to new markets, among other
advantages). Tax equalization is a tool used by employers to ensure that employees
are willing to take global assignments by removing concerns over adverse tax
consequences from an employee’s decision-making process.
�erefore, the IRS chief counsel’s memo concluded that tax equalization services
paid for by employers are excludable from employees’ income as working condition
fringe benefits.
Federal Income Tax Withholding
Every employer is generally required to deduct and withhold federal income tax
from wages. “Wages” are broadly defined to include all remuneration for services
performed by an employee for his or her employer, including cash and benefits paid
in any medium other than cash. However, wages do not include amounts that are
reasonably believed to be excluded as a working condition fringe benefit;
reasonably believed to be excluded as foreign earned income under IRC Section
���; or
paid for services performed outside of the United States and subject to
mandatory foreign income tax withholding.
�e result of these provisions is that amounts paid by an employer for tax return
preparation services for an assignee are subject to United States federal income tax
withholding.
IRC Section ��� provides for the exclusion of foreign earned income and housing
costs for qualified individuals, subject to an exclusion cap. For this provision, a
qualified individual is one with a tax home outside the United States who is either (�)
a United States citizen that is a resident of a di�erent country for a full year or (�) a
citizen or resident present in a di�erent country for at least ��� days in any ��-
month period. �e exclusion cap is pro-rated on a daily basis based on the earning
period for amounts received from sources within a foreign country, subject to an
annual limit. �e annual limit adjusts for cost-of-living factors, with the ���� limit
being $���,���.
Federal Insurance Contributions Act Withholding
Every employer paying wages is required to withhold and pay FICA taxes. �e IRC
broadly defines “wages” for FICA purposes to include all remuneration for
employment, including both cash and benefits paid in a medium other than cash.
However, one exception from the wages definition exists for benefits provided if
there is a reasonable belief that the employee will be able to exclude such benefits as
a working condition fringe benefit (among several other inapplicable exceptions).
�ough “employment” generally is defined to include all service performed by an
employee within the United States, the term also includes services performed by a
United States citizen outside the United States for an American employer, which is
essentially an enti� organized or residing in the United States.
�us, unless an amount is reasonably believed to be excludable as a working
condition fringe benefit, a United States citizen working outside of the United States
for an American employer will be subject to FICA withholding on nonexcludable
fringe benefits. �is includes costs associated with tax return preparation services
paid for by an employer.
An additional caveat worth mentioning relates to “totalization agreements” that the
United States has entered into with many countries for the purpose of avoiding
double taxation of income with respect to social taxes. Totalization agreements
provide that employees are subject to social taxes in the countries where the work is
performed. Under the “detached worker” exception, employees who work in a host
country for a temporary period are subject to social taxes only in their home
countries. A “temporary period” is �pically defined as one that is not expected to
exceed five years. In the event that an employee is sent to work in a di�erent country
for more than five years, the employee would be subject to the social taxes in the
host country.
Totalization agreements should be considered prior to the start of an assignment to
ensure the opportuni� to engineer and structure an assignment in an optimal
design.
Determining the Value of Tax Preparation Services
In determining how much income to impute to its assignee, the taxpayer in the IRS
chief counsel’s memo based its valuation of the tax return preparation services on a
survey conducted by the National Socie� of Accountants regarding average tax
preparation fees, and a U.S. Department of the Treasury notice that estimated the
average time burden and average cost of preparing a tax return.
However, the IRS disagreed with that valuation methodology and instead asked for
details regarding the actual fees paid to the employer’s service provider, a large
multinational accounting firm. �e position taken by the IRS in the chief counsel’s
memo is that the fair market value of the tax preparation services is the amount that
an individual would have to pay for such services in an arm’s length transaction.
�ough the employer’s cost is generally not determinative of the fair market value
because it may be lower than the amount an individual would have to pay for a
benefit due to bulk purchasing and economies of scale, in this instance the IRS did
focus on the actual fees paid by the employer. Based on this case’s facts and
circumstances—including the fact that individuals generally do not contract directly
with large multinational accounting firms—the IRS found that in this instance the
employer’s cost was the best indicator of the fair market value of the benefits
received.
Conclusion
On these two common fringe benefits—tax equalization services and tax preparation
services—the IRS chief counsel’s memo provides welcome guidance, albeit in a form
that may not be cited or used as precedent. With the increased prevalence of global
assignments, assignees’ heightened awareness of the plethora of available benefits,
and taxing authorities’ sophisticated means of identi�ing the tax obligations of
assignees, proactive and enhanced global tax compliance is recommended. As
employers contemplate how such global tax compliance will impact operational
budgets, consideration should be given to the tax treatment of fringe benefits
o�ered through global mobili� programs.
�is article was prepared for publication in the July ���� issue of BLR’s newsle�er, �e
Employer’s Guide to Fringe Benefit Rules.
Connecticut, New York, State Developments, Vermont
�e Americans with Disabilities Act Prohibits
Hostile Work Environments, Second Circuit
Rules
March 25, 2019
O n March �, ����, the U.S. Court of Appeals for the Second Circuit decided
Fox v. Costco Wholesale Corporation, eliminating any uncertain� concerning
whether an employee can assert a hostile work environment claim under the
Americans with Disabilities Act (ADA). �e court’s ruling is clear: “hostile work
environment claims are cognizable under the ADA.”
Background
Christopher Fox began working for Costco in ����. He has Toure�e syndrome.
According to Fox, a�er a new store manager was hired in ����, he began receiving
reprimands for various performance issues—such as leaving the store’s entrance
una�ended and leaving a shopping cart in front of freezers. Costco also received
customer complaints concerning Fox. On one occasion, a customer complained that
Fox told her that she “looked beautiful with her pocketbook.” On another occasion, a
customer complained that Fox stated she was “the love of [his] life.” Fox did not deny
the comments, claiming, “I can’t always help what I say.” As a result, the manager
suspended Fox for three days and transferred him to an assistant cashier position,
where he would have less customer contact.
According to Fox, one symptom of his Toure�e syndrome is that “he would o�en
touch the floor before moving.” He also has a verbal tic, which manifests itself in Fox
swearing. Fox stated that he would cough “in order to prevent others from hearing
him swear.”
Following his transfer to the assistant cashier position, Fox alleged Costco employees
started mimicking his verbal and physical tics, which resembled a football player
touching the ground. For example, they would state “hut-hut-hike” in his presence.
Fox claimed his managers frequently witnessed these comments and that the
comments persisted for “months and months.”
In March ����, Fox emailed Costco’s chief executive o�cer, claiming his work
environment was a�ravating his Toure�e syndrome. Fox did not mention the “hut-
hut-hike” comments. Costco investigated the ma�er and took remedial action.
Nevertheless, Fox alleged the mistreatment continued. Among other things, Fox
claims he was denied time sheets, was “reprimanded for leaving his work station to
drink water,” and was subject to ridicule from his coworkers concerning his work
performance. Once again, Costco investigated the ma�er and took remedial action.
William C. Ru�iero
Stamford
Author
John G. Stre�on
Stamford
Author
In November of ����, Fox had a panic a�ack at work. He was escorted from the
building by emergency medical technicians. From that date forward, Fox was on an
indefinite medical leave.
Fox commenced a lawsuit in the U.S. District Court for the Eastern District of New
York. In his complaint, Fox claimed disabili� discrimination, hostile work
environment, retaliation, and failure to accommodate his disabilities—all in violation
of the ADA and New York law. �e district court granted Costco’s motion for
summary judgment and dismissed Fox’s complaint in its entire�.
Second Circuit Revives the ADA Hostile Work Environment Claim
On appeal, the Second Circuit a�rmed the district court’s dismissal of Fox’s disabili�
discrimination, retaliation, and failure to accommodate claims. However, the Second
Circuit held that Fox created an issue of fact concerning whether he was subject to a
disabili�-based hostile work environment. In doing so, the Second Circuit, for the
first time, decided that a hostile work environment claim is cognizable under the
ADA.
In reaching its conclusion, the court was guided by the plain language of the ADA,
which states covered employers “shall [not] discriminate against a qualified
individual on the basis of disabili� in regard to . . . terms, conditions, and privileges
of employment.” �e ADA borrowed this language from Title VII of the Civil Rights
Act of ����, which the Supreme Court of the United States already held provides for
hostile work environment claims. According to the Second Circuit, “it follows that
disabled Americans should be able to assert hostile work environment claims under
the ADA, as can those protected by Title VII . . . and we here so recognize.” �e court
also noted that many other circuit courts recognize ADA hostile work environment
claims.
Having concluded the ADA prohibits hostile work environments, the court
proceeded to analyze whether Fox presented evidence that the harassment in his
case “was su�ciently severe or pervasive to alter the conditions of [his] employment
and create an [objectively hostile or] abusive working environment.” �e court
concluded that several of Fox’s allegations fell short. For example, his reprimands for
leaving the entranceway una�ended and leaving his register to get water did not
meet the standard. Furthermore, his suspension for making inappropriate comments
to customers failed to quali� as “objectively hostile or abusive” treatment.
In contrast, the court found the “‘hut-hut-hike’ allegations . . . raise a material issue
of fact as to whether Costco employees engaged in ongoing and pervasive
discriminatory conduct.” �e court also found “crucial” the fact that his supervisors
allegedly witnessed the comments for “months and months” and did nothing to stop
it, which served to impute the conduct to Costco.
Key Takeaways
�e Fox decision establishes that the ADA prohibits hostile work environments—at
least in the Second Circuit. Employers may want to regularly update and distribute
policies prohibiting discrimination, retaliation, and harassment based on any
protected characteristic, and providing a mechanism for employees to complain
about violations. Proper implementation of these policies, including promptly
investigating complaints and taking remedial action as appropriate, can serve as a
defense to liabili� in relation to hostile work environment claims.
Fox also serves as a reminder for employers to encourage managers who witness
possible harassment to take action. �eir failure to do so can result in liabili� for
their employers. Employers may want to train managers on policies prohibiting
discrimination, harassment, and retaliation, emphasizing the need to report—and
respond to—possible violations.
Delaware, Employment Law, New Jersey, Pennsylvania, State Developments, U.S. Virgin Islands
Reexamining Reasonableness: WhatEmployers Should Know About the �irdCircuit’s Take on the Faragher-Ellerth Defense
July 10, 2018
T he �ird Circuit Court of Appeals recently issued an opinion in Minars� v.
Susquehanna Coun�, No. ��-���� (July �, ����). �e decision, which vacated the
entry of summary judgment in favor of an employer that had asserted the Faragher-
Ellerth defense to a sexual harassment claim based upon a hostile work environment,
provides some important lessons for employers.
Background
Sheri Minars� began working as a secretary in Susquehanna Coun�’s Department
of Veteran’s A�airs in September ����. Minars� alleged that shortly therea�er, the
department’s former director, to whom she reported, began to engage in unwelcome
physical contact with her, including a�empting to kiss her on the lips, massage her
shoulders, or touch her face. Accordingly to Minars�, the former director also sent
her sexually explicit email messages, called her at home on non-work days and
questioned her about personal ma�ers during those discussions, interrogated her
about her activities during lunch hours, and engaged in other unpredictable
behavior. Minars� asked the director to discontinue the behavior soon a�er it
started, but he did not do so. At the su�estion of her physician, Minars� eventually
wrote an email to him in July ����, advising him that his behavior of hu�ing,
touching, and kissing her made her uncomfortable and asking him to stop. Although
the director responded that he would do so, the coun� learned of his conduct from a
coworker and friend in whom Minars� had confided; soon therea�er, the director
admi�ed to the allegations and his employment was terminated.
Minars� resigned several years later, and she filed a lawsuit in the U.S. District
Court for the Middle District of Pennsylvania against the coun� and the former
director. Following discovery, the coun� moved for summary judgment. �e district
court entered judgment in favor of the coun� on Minars�’s Title VII and state law
discrimination claims.
�e �ird Circuit’s Decision
�e �ird Circuit vacated the district court’s entry of summary judgment. Examining
the first prong of the Faragher-Ellerth defense (whether the employer exercised
reasonable care to prevent and correct promptly any sexually harassing behavior),
the court concluded that although the coun� had adopted a wri�en anti-
harassment policy which was provided to Minars�—and although the coun� had
reprimanded the director twice for inappropriate conduct towards other female
employees and later terminated his employment—a jury could find that the coun�
had not exercised reasonable care to prevent the director’s harassing behavior based
Simone R.D. Francis
St. �omas
New York Ci�
Author
upon the existence of a pa�ern of unwelcome advances towards other women and
the placement of Minars� in a se�ing where she worked alone with the former
director once a week.
�e �ird Circuit then turned to the second prong of the Faragher-Ellerth defense:
whether the harassed employee unreasonably failed to take advantage of any
preventative or corrective opportunities provided by the employer or to avoid harm
otherwise. �e court concluded that disputed issues of fact also existed with respect
to whether Minars� had acted reasonably in failing to take advantage of
preventative or corrective opportunities or to avoid harm otherwise. Although it was
undisputed that Minars� had not reported the harassment, the court concluded
that a jury could find her silence to be objectively reasonable in light of the specific
evidence of circumstances that contributed to Minars�’s subjective fear of
retaliation.
Key Takeaways
�e �ird Circuit’s decision highlights the increasing challenges that employers face
in defending sexual harassment claims. Although the district court found that the
coun� had satisfied the elements of the Faragher-Ellerth defense as a ma�er of law,
the �ird Circuit considered a broad range of factors relating to the director’s history
of interactions with Minars� and other women, the employer’s response to reports
it received concerning his unwelcome conduct towards other women, and the
circumstances that may have influenced Minars� to remain silent for several years.
�e court held that disputed issues of fact existed concerning the reasonableness of
the coun�’s e�orts to prevent such behavior and the reasonableness of Minars�’s
silence about the former director’s unwelcome conduct.
Beyond the potential impact of this decision in the litigation arena, employers
operating within the states that comprise the �ird Circuit (Delaware, Pennsylvania,
New Jersey, and the U.S. Virgin Islands), as well as those elsewhere, may wish to
consider measures that they can take to develop and maintain a workplace culture
that promotes reporting, avoids discouraging or prematurely discounting “late”
reports, and that includes su�cient safeguards to detect and prevent or otherwise
address pa�erns of unwelcome physical and non-physical behavior. In undergoing an
evaluation, employers may consider the following instructive points from the �ird
Circuit’s decision:
Dissemination of a wri�en policy may not be enough.
Like many employers, the coun� had adopted a wri�en policy that prohibited
workplace harassment, instructed employees to report harassment to a supervisor,
and identified alternate channels if the supervisor was the harasser. �e coun� had
also distributed its policy to employees—including Minars�—and obtained a record
of receipt.
Reprimanding a supervisor for harassment may not be enough.
Although an appropriate response will depend upon an examination of the relevant
circumstances, a reprimand may not be enough. On the two occasions when the
coun� learned that Minars�’s supervisor had engaged in inappropriate physical
contact with other female employees, it verbally reprimanded him. However, these
verbal warnings were not documented in his personnel file and there was no follow-
up by the coun�.
Pa�erns of unwelcome behavior may merit additional a�ention.
In vacating the entry of judgment in favor of the coun�, the �ird Circuit noted
that other women (including individuals designated in the policy as alternate
reporting contacts) had been recipients of unwelcome behavior from the supervisor.
Although the �ird Circuit’s decision does not make clear whether the coun� knew
of all the instances of unwelcome behavior prior to the lawsuit, the court highlighted
evidence that the supervisor’s behavior extended to individuals other than Minars�.
Physically isolated work areas may constitute a risk factor.
One factor that the court considered in assessing the reasonableness of the coun�’s
e�orts to prevent harassment and the reasonableness of Minars�’s extended silence
(for nearly four years) was the fact that Minars� and her boss generally worked in
an area situated away from other employees. Although the logistics of some
operations may make similar circumstances inevitable, certain work arrangements
may also tri�er a need to implement additional methods to prevent or detect
potential violations of company policy or the law.
Non-physical conduct may be relevant to the reasonableness of a response to harassment.
Policies and training e�orts understandably focus on unwelcome conduct based upon
an employee’s sex, and it can be more challenging to identi� and prevent non-
physical interactions that are not of a sexual nature but which impact workplace
dynamics. However, in concluding that the reasonableness of Minars�’s extended
silence was an issue for a trier of fact, the �ird Circuit took into account her
testimony that her supervisor’s behavior was unpredictable and at times “nas�,” that
he cautioned her that she could not trust his superiors, and that he told her that her
position could be eliminated if she did not appear busy. Although the court stated
that a fear of retaliation that is “generalized and unsupported by evidence” does not
excuse a failure to report, the �ird Circuit’s willingness to consider specific
explanations for non-reporting presents a practical challenge for employers that
may not know about or appreciate the impact of these interpersonal interactions
until a�er a legal claim is filed.
�e public discourse about #MeToo may be influential.
Although acknowledging that “our case precedent has routinely found the passage of
time coupled with the failure to take advantage of the employer’s anti-harassment
policy to be unreasonable,” the �ird Circuit cited media reports highlighting the
frequency of sexual harassment and the reasons victims do not report harassment to
support its conclusion that “a mere failure to report one’s harassment is not per se
unreasonable” and that the “passage of time is just one factor in the analysis.”
PERSPECTIVES
COMPASS April 2019 Edition
P4
TOP TIPS FOR EFFECTIVE INVESTIGATORY INTERVIEWS by Bernard J. (Bud) Bobber (Milwaukee)
Employers often need to conduct investigatory interviews with employees, and doing these interviews effectively is critical to getting all the facts required to make good decisions. In this article, Milwaukee shareholder Bud Bobber provides practical tips and considerations to help interviewers be more effective. To listen to podcasts on this topic, click here and here.
The goal of every investigatory interview is to get to the truth, and careful planning can help reach that goal. A thoughtfully planned interview can include these steps:
• Be circumspect when notifying the employee about the interview so as to not bring attention to it with fellow employees. Consider not scheduling the interview too far in advance because the employee may coordinate his or her story with others in advance of the interview.
• Schedule the interview at a time that works well for the employee. For example, hourly employees may be short- spoken in an interview held after hours so they can get done quickly. Also consider conducting interviews during the workday while employees are on paid time.
• Choose a conducive place for the interview. The employee will be more comfortable in a professional setting not in view of his or her coworkers. Make the interview room comfortable and not overly formal.
At the outset of the interview, the interviewer should develop a rapport with the employee, set the appropriate tone, and go over some basic points that will lead to obtaining thorough information. Consider these steps:
• Facilitate communication by thanking the employee for his or her time. Perhaps ask the employee how everything is going for him or her.
• Tell the employee why he or she is there, without providing specific details about the investigation, as that could limit the information that the employee may provide.
• Review these points and get the employee’s commitment to them:
It is crucial that the employee give truthful answers. The employee should not withhold information—his or
her answers must be complete. The employee must let the interviewer know if he or she
does not understand a question. • Remind the employee that he or she is protected from
retaliation or backlash for participating in the investigation in good faith.
Before the Investigatory Interview Beginning the Investigatory Interview
These are all simple steps, but working these into your standard interview routine can help obtain moreinformation and reliable facts—all of which go toward resolving the workplace issue being investigated.
Create a checklist of steps to take when concluding the interview. Once you have completed the substantive portion of the interview, go through that checklist. • Ask the employee: At the beginning of the interview, you committed to give truthful and complete answers; were your answers truthful and complete? Do you have notes, text messages, or anything else related to this subject? Have you talked with anyone else about this? Is there anything else you would like to add?
Concluding the Investigatory Interview
• If applicable, remind the employee to keep things confidential. Note, though, that rules about confidentiality vary based on the type of investigation, whether the workplace is unionized, and the employee’s status as a manager or supervisor. Some employees may have the right to speak with union representatives or counsel. Don’t have a blanket policy that all things are confidential in all circumstances.
• If you plan to prepare a written statement, tell the employee that the interviewer will be doing so and that the employee will be asked to sign off on its accuracy. Prepare the statement as soon after the interview as possible.
• Remind the employee that he or she will not be retaliated against for participating in the investigation, and that he or she should not engage in activities that can be viewed as retaliation against others who are involved in or the subject of the investigation.
Healthcare, Traditional Labor Relations
NLRB Orders Hospital to Reinstate FormerEmployee Who Shared Sta�ng ConcernsWith Media
December 10, 2018
A recent decision by a National Labor Relations Board (NLRB) administrative
law judge (ALJ) serves as a good reminder that even nonunion employees in
healthcare se�ings are protected by Section � of the National Labor Relations Act
(NLRA). On November �, ����, ALJ Paul Bogas held that a former nonunion
employee of Maine Coast Memorial Hospital had engaged in protected activi� when
she sent a le�er to a local newspaper.
Background
Karen-Jo Young, who was the hospital’s activities coordinator, sent a le�er to a
Hancock Coun�, Maine newspaper, the Ellsworth American, raising concerns on
behalf of fellow employees regarding employee dissatisfaction and nurse sta�ng
levels at the hospital. �e same day that her le�er to the editor was printed in the
newspaper, the hospital discharged Young for violating its media policy, which
barred workers from speaking to the press without permission.
Young subsequently filed an unfair labor practice charge with the NLRB on October
��, ����, alleging that the hospital terminated her employment for engaging in
protected concerted activi� under Section � of the NLRA. Section � of the NLRA
guarantees employees “the right to self-organization, to form, join, or assist labor
organizations, to bargain collectively through representatives of their own choosing,
and to engage in other concerted activities for the purpose of collective bargaining
or other mutual aid or protection,” as well as the right “to refrain from any or all
such activities.”
�e case was tried on July �� and ��, ���� before ALJ Paul Bogas.
�e ALJ’s Decision
Judge Bogas ruled in favor of Young, finding that, because her le�er to the editor
complaining about sta�ng levels constituted protected concerted activi�, the
hospital had improperly discharged her in violation of Section �. In his opinion,
Judge Bogas wrote that “the board has repeatedly held that health care facili�
employees engage in concerted activi� protected by Section � of the NLRA when,
like Young did here, they use a le�er to the editor or another �rd-par� channel to
protest deficiencies in sta�ng levels or other working conditions that have an e�ect
on patient care.”
Jana S. Baker
Dallas
Author
James T. McBride
Dallas
Author
Bogas thus ordered the hospital to fully and immediately reinstate Young and “make
her whole for any loss of earnings and other benefits.”
Key Takeaways
�e ALJ’s opinion reinforces that sta�ng levels and overall employee satisfaction are
considered terms and conditions of employment, about which an employee’s public
dissemination of concerns would fall within the protections of Section �.
Because sta�ng complaints are common in healthcare, particularly in busy hospital
se�ings, the ruling is an important reminder that employees may not be disciplined
or discharged for expressing these �pes of concerns, whether they are discussing
sta�ng internally or sharing their views with a third par�. �ird parties include the
public domain, which encompasses not only printed newspaper editorials, as in this
case, but also online blogs and social media.
As a result, healthcare employers may want to use caution when investigating and
taking potential employment actions where an employee has spoken out on behalf of
coworkers regarding the terms and conditions of their employment, whatever the
medium. In addition, healthcare employers may want to revisit and consider
modi�ing their social media, Internet use, and public relations policies; codes of
conduct; and any other policy that could potentially discourage or chill this �pe of
protected activi�.
Traditional Labor Relations
NLRB Narrows the Scope of NLRA Section �Protection for Employee Complaints
January 22, 2019
O n January ��, ����, the National Labor Relations Board issued an employer-
friendly decision in Alstate Maintenance LLC, ��� NLRB �� (����), narrowing
the scope of protection for employee complaints. In doing so, it reversed an Obama-
era Board decision that had expanded employee protections, and clarified that even if
an employee states a gripe referencing coworkers through the plural pronoun “we,” it
is not necessarily protected and may be a valid basis for discipline or discharge. �e
Board also declared that an individual complaint is not elevated to protected status
simply because it is made to a manager and in the presence of other employees. �is
decision narrows the Board’s definition of “protected concerted activi�” and
distinguishes group complaints from individual gripes in the workplace. �e three
Board members appointed by President Trump joined in the ruling, while the one
member appointed by President Obama penned a very critical dissent.
Background
Alstate Maintenance provides ground services at John F. Kennedy International
Airport. Employee Trevor Greenidge was employed as a s�cap. S�caps assist the
arriving airline passengers with their lu�age outside the terminal and generally
accept tips, which constitute the largest part of their compensation.
In July ����, Greenidge was working with three other s�caps when a manager
directed them to assist with a soccer team’s equipment. Greenidge remarked, “We did
a similar job a year prior and we didn’t receive a tip for it.” When the van with the
team’s equipment arrived, a manager waved the s�caps over to the van to assist, but
Greenidge and the other s�caps walked away. Ba�age handlers from inside the
terminal began assisting with the equipment before Greenidge and the other
s�caps helped finish the job. Following this incident, a manager informed the
s�caps’ supervisor of the subpar customer service, and the employer fired Greenidge
and the other three s�caps.
A regional o�ce of the Board issued a complaint on behalf of Greenidge, alleging
that he had been discharged for engaging in protected concerted activi� in violation
of the National Labor Relations Act (NLRA). An administrative law judge (ALJ)
dismissed the complaint, finding that the gripe regarding the tipping habits of the
soccer team was neither concerted activi� nor undertaken for mutual aid or
protection, and was thus a valid basis for the firing. �e general counsel appealed to
Board.
�e Decision
Bernard J. Bobber
Milwaukee
Author
Kayla A. McCann
Milwaukee
Author
�e �–� Board majori� a�rmed the ALJ and upheld the firing. In doing so, the
Board overruled Wyndham Vacation Ownership dba WorldMark by Wyndham, ��� NLRB
��� (����), and reconfirmed Board precedent from the ����s in the Meyers Industries
line of cases. In WorldMark, the Obama-era Board concluded that an employee had
engaged in concerted activi� when he protested publicly in a group se�ing, even
though he had not previously consorted with coworkers regarding workplace issues.
�is ruling conflicted with the holdings in the Meyers Industries cases, in which the
Board held that an employee’s activi� is concerted only if he is engaged with other
employees and does not solely act on behalf of himself. Unable to reconcile the two
cases, the Board in the present case overruled WorldMark and proceeded with the
standard set forth in the Meyers Industries cases.
In Alstate Maintenance, the Board explained that “to be concerted activi�, an
individual employee’s statement to a supervisor or manager must either bring a truly
group complaint regarding a workplace issue to management’s a�ention, or the
totali� of the circumstances must support a reasonable inference that in making the
statement, the employee was seeking to initiate, induce or prepare for group action.”
Applying the standard to the issue presented, the Board a�rmed the ALJ’s ruling
that Greenidge had not engaged in concerted activi� and, even if he had, Greenidge
did not make his remark about the soccer team’s tipping habits for the purpose of
mutual aid or protection of the collective group of employees. �e Board expressly
rejected the general counsel’s argument that Greenidge’s use of the plural pronoun
“we” in his gripe necessarily made his complaint protected activi�.
�e decision spells out relevant factors to consider in deciding whether an employee’s
statement made in a group context is protected concerted activi�:
whether “the statement was made in an employee meeting called by the
employer to announce a decision a�ecting wages, hours, or some other term or
condition of employment”;
whether “the decision a�ects multiple employees a�ending the meeting”;
whether “the employee who speaks up at the meeting did so to protest or
complain about the decision, not merely . . . to ask questions about how the
decision has been or will be implemented”;
whether “the speaker protested or complained about the decision’s e�ect on the
work force generally or some portion of the work force, not solely about its
e�ect on the speaker him- or herself”; and
whether “the meeting presented the first opportuni� employees had to address
the decision, so that the speaker had no opportuni� to discuss it with other
employees beforehand.”
Although not all of these factors must be present to support a reasonable inference
that an employee is seeking to initiate a group action, they can help employers
understand when employees who speak out have engaged in protected concerted
activi�.
Key Takeaways
�e decision in Alstate Maintenance narrowed the definition of “concerted activi�”
under the NLRA. In doing so, the Board clarified the di�erence between group
actions and individual complaints, even if made in the group context—two ideas that
were easily conflated under the overturned WorldMark holding. As a result of Alstate
Maintenance, employers generally have more leeway to use discipline to regulate an
individual employee’s statement, even if that statement is a work-related complaint
that references “we” or “us.” Unions and individuals alike may find it more di�cult to
assert that an individual employee’s statement is concerted activi� that is protected
by Section � of the NLRA.
�e Board may not be done reshaping Section � analysis yet. It also indicated
interest in reconsidering other cases that “arguably conflict” with the standard set
out in the Meyers Industries cases.
PERSPECTIVES
COMPASS July 2019 Edition
P4
TOP TIPS: SERVICE AND EMOTIONAL SUPPORT ANIMALS AS ACCOMMODATIONS
Many employers have been experiencing an increase in the number of requests to bring service and emotional support animals to work as a reasonable accommodation under the Americans with Disabilities Act (ADA). Although Title I of the ADA, which governs the employment relationship, does not specifically reference animals as an accommodation, they may be required in a number of circumstances. In addition to animals that actually perform active tasks, Title I may require employers to allow animals that perform no specific task, such as emotional support animals, as an accommodation.
by David Raizman (Los Angeles) and James M. Paul (St. Louis)
Animals as Workplace Accommodations
Service Animals in Private Businesses or Organizations
When an employee requests to bring an animal into the workplace as an accommodation, employers should engage in the interactive process just as they would do for other accommodation requests, and should follow the same standards and practices that they would otherwise use during the interactive process, including:
• requiring documentation from a healthcare provider that a disability exists, if it is not obvious;
• requiring documentation on how the animal will help the individual perform the job (again, unless it is obvious);
• objectively evaluating the request for undue hardship regardless of the employee’s claimed disability or the type of animal requested;
• if the initial request would present an undue hardship, exploring whether there are other options that will accommodate the employee’s disability;
• considering safety and health concerns or threats, including those that affect other employees, customers, and guests in the workplace; and
• documenting all stages of the interactive process.
If it is determined that the animal should be allowed as an accommodation, the employer may set standards and expectations about the animal’s presence in the workplace. These standards should be documented and agreed upon in writing by the employee, and may include:
• the areas of the workplace that the animal may be present; • expectations about odor and potty-training; • appropriate behavior, including the expectation that the animal not engage in menacing or
disruptive behavior or otherwise endanger the health or safety of anyone in the workplace; and • employee supervision and control of the animal at all times.
Like all accommodations, the employer should continue to monitor both the effectiveness of the accommodation and the impact on the workplace. After a trial period, if the animal’s presence creates problems for coworkers or office decorum, steps may be taken to modify, refine, or discontinue the accommodation.
There has also been an increase in the number and types of requests by customers or others to bring service animals into public accommodations (private businesses or organizations into which the public is invited). Many states have laws affecting these issues that go beyond what Title III of the ADA requires. Under federal law, the only service animals that may be covered are dogs and miniature horses—and emotional support animals (of any species) are not protected. Where a person seeks to bring a service animal into a public accommodation, the owner may ask only the following questions:
• Is this a service animal that is required because of a disability?• What work or task has the animal been trained to assist with?
Unless required by state law, service animals in public accommodations need not be identified with a vest or other item. As with workplace accommodations, these accommodations can be denied where the animal presents a direct threat to the health or safety of others or the animal fails to maintain behavior appropriate to the setting.
www.ogletree.comP6
N THE RADAR SUMMER IS HERE: ARE YOU PREPARED TO PROTECT
YOUR EMPLOYEES FROM THE HEAT?
On May 31, 2019, National Heat Awareness Day, OSHA and the National Weather Service (NWS) teamed up to encourage employers and workers to recognize the warning signs for heat illness. OSHA also recently kicked off its annual heat illness prevention campaign: “Water. Rest. Shade.” As part of this campaign, OSHA outlines the dangers of working in the heat, details employers’ responsibilities to protect workers, and provides educational and training materials for employers. The campaign’s website also offers instructional videos and graphics that are free for employers to use in their publications and social media campaigns. OSHA and the National Institute for Occupational Safety and Health (NIOSH) have also worked together to create the Heat Safety Tool smartphone app, which provides heat safety information. Learn more about OSHA’s heat illness prevention campaign and the Heat Safety Tool app on the agency’s website at https://www.osha.gov/heat/.
OSHA recommends that heat-related illness prevention include “engineering controls, such as air conditioning and ventilation, that make the work environment cooler, and work practices such as work/rest cycles, drinking water often, and providing an opportunity for workers to build up a level of tolerance to working in the heat.” The agency also places a great deal of emphasis on training so that employers know and look for symptoms of heat-related illness and are prepared for an emergency.
Employers should consider using bottled water, as opposed to a container of potable water—to make it easier to track how much to bring and how much employees consume.
While many affected employers implement mandatory rest periods depending on the temperature (with stop work orders when the temperature becomes dangerously high), each employee acclimates to the heat differently. One employee may only need a few minutes of rest every few hours; another may need 10 to 15 minutes every hour. Employers may want to implement a buddy system to encourage employees who work together to watch for and quickly spot the first signs of heat illness in their coworkers.
When working outside, OSHA seems to favor canvas shades—many of which are easy to assemble and provide plenty of room for employees—or air conditioning, such as in a running vehicle.
OSHA does not have a specific standard for exposure to heat and relies on the General Duty Clause under the Occupational Safety and Health Act to cite employers for heat-related hazards. According to OSHA, courts have interpreted the General Duty Clause to mean that employers are required to provide a workplace free of heat-related hazards that are likely to cause death or serious bodily harm. But California does have a specific heat illness prevention standard with which employers with operations in the state must comply. The California standard contains specific requirements for water, shade, and rest periods.
Water Consumption
Rest Periods
Cool/Shady Area
As the summer heats up, employers should consider implementing the following recommendations:
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The heat of summer has arrived, which means potentially dangerous work conditions. Warm and humid weather can increase the risk to workers both indoors and outdoors. As a result, the Occupational Safety and Health Administration (OSHA) has launched a number of initiatives aimed at keeping workers safe.
by Shontell Powell (Atlanta)
Joseph L. BeachboardManaging Director || Torrance, Los Angeles
Joseph (“Joe”) Beachboard is a nationally recognized expert on labor and
employment law issues who joined Ogletree Deakins in ����. He helps
employers avoid work-related legal exposure, including providing
training to a varie� of high-profile organizations. He regularly speaks
at large employment law conferences around the country and has been
quoted in a number of prestigious publications, including �e Wall Street
Journal, Los Angeles Times, National Law Journal, and HR Magazine.
Since ����, Joe has served as the chair of Ogletree Deakins’ Client
Services Commi�ee–which oversees the marketing, business
development, publications, events, and other strategic initiatives of the
firm. In this capaci�, he works directly with the firm’s �� o�ces and ���
a�orneys. Joe and the Client Services Commi�ee also are responsible
for ensuring the firm’s clients receive premier service.
Joe brings a strong business perspective to his practice, formed in part
by the �� years he served as President of �e Labor Le�ers Inc. prior to
joining the firm. �e Labor Le�ers, Inc. provided information services,
resources, and practical advice to ��,��� employers on labor and
employment law developments in �� states. Before his decade in the
business world, Joe practiced law at Paul, Hastings, Janofs� & Walker
in Los Angeles.
Rodolfo R. AgrazShareholder || Dallas, Raleigh
*Currently licensed in Georgia and North Carolina only.
Mr. Agraz has experience helping a broad spectrum of clients with labor
and employment challenges. His practice is limited exclusively to
ma�ers of federal labor law. He represents clients in diverse industries
during union organizing a�empts involving collective bargaining
negotiations pursuant to the National Labor Relations Act and litigation
before the NLRB. Additionally, he advises clients on best practices in
labor relations and the development of comprehensive labor strategies
to preserve the abili� to maintain direct relationships with employees.
He works with executive leadership and first-line supervisory sta� to
build a positive working environment. Mr. Agraz is fluent in Spanish,
and serves as a member of the firm’s traditional labor and diversi� and
inclusion steering commi�ees.
Mr. Agraz’s broad base of experience includes:
Representing clients in manufacturing, distribution, teleservices,
chemical, petroleum, medical laboratory, transportation, hospitali�,
healthcare, food production, restaurant, aerospace and automotive
industries throughout the United States during union organizing
a�empts;
Serving as chief negotiator in first contract, subsequent contract,
and post-bankruptcy negotiations;
Training supervisors and managers in a wide varie� of federal labor
relations ma�ers.
Melissa A. BaileyShareholder || Washington D.C.
Melissa Bailey focuses her practice on occupational safe� and health
issues, and also serves on the Firm’s Board of Directors. She litigates
OSHA cases before federal and state agencies and courts, and also
represents employers during government inspections and
investigations. Her practice also includes providing compliance advice
and conducting privileged audits on complex workplace safe� issues.
Melissa represents employers in a wide range of industries, including
electric utilities, chemical manufacturing/refining, retail, food
processing, construction, and drug manufacturing. Melissa also
regularly represents clients before OSHA in connection with
rulemaking and policy formation. She has testified before Congress
regarding OSHA issues, and has advocated for management interests
with regard to OSHA enforcement and compliance policies.
Melissa has practiced occupational safe� and health law for over ��
years and, as a result, she understands the legal issues as well as the
practical issues confronting employers. She routinely assesses both the
current and future liabili� that may result from significant OSHA
citations, and identifies the most e�ective approach – whether that is a
strategic se�lement or litigation – in each case.
Melissa also represents clients in whistleblower ma�ers under a broad
range of statutes, including the Occupational Safe� and Health Act, the
Surface Transportation Assistance Act, the Toxic Substances Control
Act and the Clean Air Act. Her experience ranges from conducting
investigations and developing position statements to litigating
whistleblower cases before Administrative Law Judges and in court.
Melissa is an active speaker on OSHA and whistleblower issues. She
speaks to trade association members and clients regarding a varie� of
OSHA issues, including strategies to use during an OSHA inspection to
minimize liabili�, conducting privileged audits and accident
investigations, and the impact of OSHA’s regulatory and enforcement
agenda on particular industries. Melissa is also the Employer Co-
Chairperson of the American Bar Association Occupational Safe� and
Health Commi�ee.
Dr. Ulrike Conradi
Managing Partner / Certified Specialist for EmploymentLaw || Berlin
Dr. Ulrike Conradi joined the Berlin o�ce of Ogletree Deakins in ����
as a partner. She advises companies and the public sector on all
employment related ma�ers, especially those relating to redundancies,
restructurings, merger and acquisitions and privatizations. Her tasks
include advising on the conclusion of collective agreements with works
councils and unions in particular se�lement of interests agreements and
social plans, mass dismissals and employee benefits.
In addition Ulrike is an expert in pension law as well as in all
compensation and benefit ma�ers. She advises employers with regard to
the implementation, modification, harmonization and closure of
company pension plans as well as pension adjustments, the transfer of
pension commitments and expectancies. Finally, Ulrike is highly
experienced in pension litigation.
She has published several articles on employment law topics and
regularly gives talks and facilitates seminars on employment
issues. Ulrike is a Client Choice Award Winner ���� in the category
“Employment and Benefits” for Germany.
Before joining Ogletree Deakins she worked in the Berlin o�ce of
Baker& McKenzie.
Ulrike Conradi speaks English and French proficiently.
M. Kimberly HodgesO�ce Managing Shareholder || Memphis, Jackson
Kim Hodges is the O�ce Managing Shareholder in Ogletree Deakins’
Memphis and Jackson, MS o�ces and has concentrated her practice in
employment law and litigation for over nineteen years. Prior to joining
Ogletree Deakins, Kim was Lead Counsel in Federal Express
Corporation’s Litigation and Employment group and worked in various
roles in the HR departments of TruGreen ChemLawn, Trailmobile, and
Riceland Foods. In addition to other honors, she is listed in the ����
edition of Best Lawyers in America, and was a ���� Honoree in the
Memphis Business Journal’s ‘Best of the Bar’ Awards. Kim also has an AV-
Preeminent rating from Martindale-Hubbell in both the Peer Review
and Judicial Review categories, and is licensed in Arkansas, Tennessee,
and Mississippi.
�roughout nineteen years as a litigator, Kim amassed a wealth of
employment and commercial litigation experience and defended
corporate clients as first-chair counsel in state and federal courts across
the United States. She has extensive appellate experience, and has
represented clients in appeals before the U.S. Court of Appeals for the
� , � , � , � , � , � and �� Circuits. Kim also defends clients in
ma�ers before the EEOC, the Department of Labor, and appeals before
the Administrative Review Board.
Kim’s experience as both a litigator and an advisor runs the gamut of
employment law and related issues, including: discrimination and
harassment, compliance with wage and hour laws, state and federal
disabili� discrimination and accommodation, public access for disabled
individuals, FMLA leave and interference, age discrimination, complex
contracts, non-competition and non-solicitation agreements, trade
secrets, whistleblower claims, torts, and antitrust/unfair competition
issues.
Prior to becoming an a�orney, Kim worked in several HR departments
assisting with wage and benefit surveys, training and employee
development, employee satisfaction surveys, and general HR issues. In
her practice as an employment a�orney today, Kim combines her HR
experience and legal expertise to provide strategies and education for
employers seeking to best synchronize legal requirements with the
demands of their unique business. Kim is a frequent invited speaker and
article contributor on employment law and litigation topics for bar
associations and professional associations throughout the country.
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Christopher E. MooreO�ce Managing Shareholder || New Orleans
Shareholder || Houston
Chris Moore is an advocate for employers, and has successfully
defended federal and state law claims of race, sex, religious, age and
disabili� discrimination; breach of contract, wrongful termination,
retaliation, defamation, harassment, infliction of emotional distress,
misrepresentation, interference with contract, whistleblower, employee
benefits and abuse of right claims; state and federal wage claims; family
and medical leave claims; unfair labor practices; and labor arbitrations.
He has also successfully represented employers in disputes involving
non-compete and non-solicitation agreements.
Chris has also represented management in union organizing campaigns,
labor disputes and the defense of unfair labor practice charges. As an
advisor, Chris has prepared wri�en employment practices, systems,
forms and contracts, and has trained managers on their implementation
and administration.
Jimmy F. Robinson, Jr.O�ce Managing Shareholder || Richmond
Jimmy is a Founding Shareholder of the firm’s Richmond o�ce and
serves as the o�ce’s Managing Shareholder. Jimmy focuses his practice
on traditional labor and employment litigation ma�ers.
In his traditional labor practice, Jimmy handles all aspects of a
traditional labor practice, including litigating labor arbitration cases,
conducting election campaigns, handling proceedings before the
National Labor Relations Board including unfair labor practice charges.
His practice includes representation of national and international
companies with operations across the United States. He also represents
non-unionized employers in the development of strategies designed to
help those employers remain non-union by advising them on labor and
employee relations through issue assessment, supervisory training,
advice and counsel with respect to policy development, and
lawful/positive communications; where necessary, he advises and
counsels employers during union organizing campaigns.
In employment litigation ma�ers, Jimmy represents employers in a wide
varie� of employment litigation ma�ers in regulatory agencies and in
federal and state courts. He defends employers against single par� and
collective/class action cases involving allegations of sex, race, national
origin, religion, gender, age and disabili� discrimination; wrongful
discharge claims; breach of employment contracts; non-compete
litigation. He also defends employers against claims for sexual
harassment; claims for relief under the Family Medical Leave Act and
pay discrimination claims including cases under the Fair Labor
Standards Act; OSHA and whistle blower ma�ers; and defamation,
among other tort claims arising from the employment relationship. He
handles single plainti� claims as well as collective and class action
litigation.
He assists his clients in managing administrative agency investigations,
including systematic initiative, pa�ern and practice and disparate impact
claims involving unequal pay, background checking, promotion, hiring
and pre-employment testing, and reasonable accommodation processes,
among many others. He also counsels employers concerning personnel
policies and workplace issues, including leave, benefits, severance, wage
and hour obligations, employee discipline, a�rmative action plans and
employment discrimination ma�ers.
Jimmy is an adjunct professor at the Universi� of Richmond where he
teaches Employment Law & Policy and Labor Law. Mr. Robinson has
over sixteen years of experience serving as an advisor and advocate for
both private, and public schools – from communi� colleges to statewide
universi� systems. Mr. Robinson skillfully advises and defends higher
education clients on virtually every �pe of employment and labor law
ma�er with a full appreciation of the unique challenges that universi�
senior o�cers and general counsel face as they a�empt to manage the
sensitive issues in the higher education environment. Mr. Robinson
knows how to work within the special constraints and imperatives of
educational institutions. He provides litigation defense, and legal advice
involving tenured facul�, adjunct facul�, administrators, students,
student organizations and sta� members. His experience includes
representing higher education clients in a varie� of litigation ma�ers,
such as defense of claims brought under Title VII, Title IX, Title III, the
ADA, the ADEA, civil RICO and USERRA, wrongful discharge, breach
of contract, FERPA, the FMLA and other forms of leave, class actions,
wage and hour disputes, individual and o�cial capaci� claims under ��
U.S.C. §§ ����, and related state law tort claims. He also provides day-
to-day legal advice on a varie� of higher education-related subjects,
including hiring, promotion, tenure disputes, tenure reviews, shared
governance concerns, facul� discipline and misconduct, labor
initiatives involving facul� and graduate students, reductions-in-force,
leaves of absence issues, termination, and student organization
disciplinary ma�ers. His background includes in-depth experience with
public policy, and he has considerable experience responding to EEOC
charges and complaints filed with the U.S. Department of Education
O�ce for Civil Rights.
Jimmy is commi�ed to public service ma�ers. His public interest work
is significant and varied, and includes: representation of the indigent in
custody and other domestic relations ma�ers; providing pro bono
simple wills, advance medical directives and powers of a�orney to First
Responders through the Virginia State Bar Young Lawyers Conference;
and pu�ing on multiple Senior Citizens Seminars over-viewing the
pertinent and changing laws and programs a�ecting senior citizens in
Virginia.
Jimmy is the former President of the Virginia State Bar, Young Lawyers
Conference, and the former President of the Virginia Association of
Defense A�orneys, Young Lawyers Division.
Charles L. �ompson, IVShareholder || San Francisco
Charles L. �ompson IV counsels and defends employers in wrongful
termination, discrimination, and other employment-related ma�ers.
�ese areas include trade secrets and unfair competition, California and
federal leaves of absence, ADA compliance, and wage and hour
compliance.
Charles also represents employers in traditional labor law ma�ers. He
advises and represents employers in collective bargaining. He also
represents employers in ma�ers before the National Labor Relations
Board, including in unfair labor practice and representation hearings. In
addition, he represents employers in discharge and contract
interpretation arbitrations.
He creates and provides workplace training programs to California
employers on sexual harassment, workplace violence, corrective action
and discipline, workplace investigations, managing the borderline
employee, and avoiding wrongful termination claims.
Charles was a judicial clerk for �e Honorable Patrick E. Hi�inbotham
of the U.S. Court of Appeals for the Fi�h Circuit. He has been a facul�
member of San Francisco Law School, where he taught constitutional
law and employment discrimination law.
Charles also has served as President of and outside counsel to Mission
Neighborhood Centers, a non-profit organization providing social
services to the Mission District in San Francisco, California. In
addition, he has served as First Vice President, Secretary and outside
counsel to the NAMES Project Foundation, sponsor of the AIDS
Memorial Quilt.
Vince M. VerdeO�ce Managing Shareholder || Orange Coun�
Vince Verde is the head of the firms Trial Practice Group (“TPG”). He is a
litigator and former prosecutor with extensive jury and non-jury trial
experience. He has tried and won jury trials in multiple jurisdictions and
represents employers in state and federal courts in single and multi-
plainti� actions. His diverse practice includes the representation of
regional and national clients in all phases of litigation involving
employment and labor ma�ers, unfair competition, trade secret and
non-compete ma�ers, work place violence, intellectual proper� rights,
class action lawsuits and complex business disputes. He has extensive
experience in all areas of employment law, including wrongful
termination, retaliation and ����.� claims, discrimination, harassment,
wage and hour issues, family and medical leave, disabili�
discrimination and accommodation and employee privacy. Mr. Verde
draws on his skills as a trial a�orney in order to successfully resolve
ma�ers early in the litigation or obtain dismissals through summary
judgment.