Three members of our Employment Group were selected to the 2014 Maryland Super Lawyers & Rising Stars

We are thrilled that three members of our Employment Group were selected to the 2014 Maryland Super Lawyers & Rising Stars lists. Hope Eastman has been listed in Maryland Super Lawyers since 2007 for Employee Litigation: Defense. Jim Hammerschmidt was included on the 2014 Maryland Super Lawyers list for Employment & Labor, and Ethan Don was selected as a 2014 Maryland Rising Star for General Litigation. Only 5% of attorneys in the state were selected as Maryland Super Lawyers, and only 2.5% of attorneys in the state were included on the Maryland Rising Stars list.

Worker Misclassification Bill Re-Introduced in U.S. Senate

Congress is once again taking aim at addressing the misclassification of independent contractors. On November 12, Senator Bob Casey (D-PA) introduced the Payroll Fraud and Prevention Act (PFPA) of 2013 (S. 1687). The bill is essentially identical to one bearing the same name that was introduced in 2011, but on which no action was taken. The reintroduction of this bill should serve as a reminder to employers to review worker classifications for current employees and contractors and to carefully consider classifications and hiring policies for new hires.

Significant Court Win for Employers

Companies can require employees to arbitrate employment disputes individually and prohibit them from pursuing class action lawsuits.

Key practice point 1. Employers can now require employees to resolve employment-related disputes individually, waiving any right to pursue class action or collective action claims through arbitration or in court. Employers who use mandatory arbitration agreements with their employees should be sure that they contain clear prohibitions on employees pursuing class and collective claims. The Fifth Circuit Court of Appeals has overturned a controversial National Labor Relations Board (NLRB) ruling that such provisions violate the National Labor Relations Act (NLRA). D.R. Horton, Inc. v. National Labor Relations Board.

When Are Commissions Earned In Maryland?

Under the Maryland Wage Payment and Collection Law, employers must pay employees “all wages due for work that the employee performed before termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not been terminated.”  “Wages” include commissions, and the law has been applied to require payments to former employees who have done everything required of them to earn the commission before termination of employment.

Senate Passes Employment Non-Discrimination Act

The Employment Non-Discrimination Act (ENDA) passed the Senate by a vote of 64-32 on November 7, 2013.  The vote marked the first time that the measure prohibiting employment discrimination on the bases of sexual orientation or gender identity has ever passed either congressional chamber.

Senate Considers Employment Non-Discrimination Act (ENDA)

By former Associate Jack Blum

On October 28, 2013, Senate Majority Leader Harry Reid (D-Nev.) announced that the United States Senate may in the very near future vote on the Employment Non-Discrimination Act (ENDA), which would prohibit workplace discrimination on the basis of sexual orientation and gender identity. As this is written on the afternoon of November 4, ENDA stands only one vote short of the 60 needed to eliminate the possibility of a filibuster. If Senator Reid can obtain the 60 votes necessary for cloture, ENDA will receive its first “up or down” Senate vote and given the chamber’s Democratic majority, seems likely to pass. While ENDA appears to face an uphill battle in the Republican-dominated House of Representatives, where Speaker John Boehner (R-Oh.) has already expressed his opposition to the measure, the impending vote nonetheless presents an opportunity to remind employers that state and local laws in Maryland and the District of Columbia, but not Virginia, already prohibit discrimination on the bases of sexual orientation and gender identity.

Which Subcontractors Are Subject to Affirmative Action Regulations?

Companies can require employees to arbitrate employment disputes individually and prohibit them from pursuing class action lawsuits.

Key practice point 1. Employers can now require employees to resolve employment-related disputes individually, waiving any right to pursue class action or collective action claims through arbitration or in court. Employers who use mandatory arbitration agreements with their employees should be sure that they contain clear prohibitions on employees pursuing class and collective claims. The Fifth Circuit Court of Appeals has overturned a controversial National Labor Relations Board (NLRB) ruling that such provisions violate the National Labor Relations Act (NLRA). D.R. Horton, Inc. v. National Labor Relations Board.

Federal Contract Compliance Manual Revised After 25 Years

In our last OFCCP-related blog, we reported on the new OFCCP regulations that require federal contractors and subcontractors for the first time to adopt quantifiable hiring goals for individuals with disabilities and hiring benchmarks for certain veterans.

OFCCP’s August Actions: Huge Headaches for Government Contractors

Just in time for the Labor Day holiday, the Office of Federal Contract Compliance Programs (OFCCP) on August 27, 2013 issued two sets of final regulations designed to enhance greatly employment opportunities for veterans and individuals with disabilities. These regulations (available here and here) were published in the Federal Register on September 24, 2013 and will go into effect on March 23, 2014. Government contractors have already been obligated to engage in affirmative action under existing regulations. According to Patricia Shiu, director of the OFCCP, these regulations will be “an important step toward reducing barriers for real opportunities.”

Maryland Employers – Do You Comply with the New Pregnancy Law?

The October 1 deadline for Maryland employers to comply with the state’s new Reasonable Accommodations for Disabilities Due to Pregnancy Act (the “Act”) is here.  All Maryland employers with 15 or more employees should promptly take steps to comply with the new law.

Court Slams EEOC Attempt To Preclude Background Checks

In one of a handful of recent Equal Employment Opportunity Commission (“EEOC”) cases brought challenging  employers’  use  of background checks, the EEOC has been squarely defeated (at least prior to any appellate review).  Judge Roger W. Titus of the United States District Court for the District of Maryland granted summary judgment in favor of the employer, Freeman, dismissing the EEOC’s claims that Freeman’s use of criminal and credit histories in hiring had an unlawful disparate impact on African-American, Hispanic, and male applicants.  The court provided a limited roadmap  for employers on how to deal with credit and criminal background checks.  It  makes clear that, at least for Judge Titus, the important aspects of an employer’s background check policy are:  not using blanket checks; separating out “credit sensitive” positions from ones where a credit history is likely not relevant; limiting how far back in time the criminal background checks extend; evaluating the relationship between underlying criminal conduct and the position at issue; generally performing the background checks after an offer has been made; and, having a multi-step review process prior to final employment decisions.

Attorneys General Challenge EEOC’s Criminal History Policy

Shortly before the EEOC v. Freeman case was decided, nine state attorneys general sent a letter to the Equal Employment Opportunity Commission (“EEOC”) challenging the EEOC’s position on the permissible use of criminal history background checks.  In particular, the letter (found here[AU2] ) addressed the lawsuits filed by the EEOC against Dollar General and BMW Manufacturing Co., LLC (“BMW”) and those companies’ use of bright-line criminal background checks in the hiring process.  The attorneys general accused the EEOC of attacking the use of criminal background checks in the hiring process, of unlawfully expanding Title VII protections, and of creating a further burden on businesses.

Tweeting for a Toke, Man Loses Job

A reminder to all employers and employees about the relevance of social media in the workplace – if you’re planning something illegal, posting it publicly on Twitter (or Facebook, Instagram, or any other publicly accessible social media site) is generally a bad idea.

Windsor, DOMA and Qualified Retirement Plans

As we previously reported, on June 26, 2013, in the case of U.S. v. Windsor , the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) – which defined “marriage” as “only a legal union between one man and one woman as husband and wife” and “spouse” as only “a person of the opposite sex who is a husband or a wife” – was unconstitutional under the Fifth Amendment. The Court’s decision in Windsor means that the marriage-dependent federal rights and privileges which, because of DOMA, were previously unavailable to same-sex couples, will now apply to qualifying same-sex married couples. This change will impact certain employment rights, as well as the nature and administration of the programs and benefits that many employers provide to their employees. For a comprehensive discussion of these areas which will be impacted and the outstanding questions that remain after Windsor, please see our article here.

From FMLA to FSAs: Employee Health Issues Post-DOMA

As we previously reported, on June 26, 2013, in the case of U.S. v. Windsor, the U.S. Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) – which defined “marriage” as “only a legal union between one man and one woman as husband and wife” and “spouse” as only “a person of the opposite sex who is a husband or a wife” – was unconstitutional under the Fifth Amendment.  The Court’s decision in Windsor means that the marriage-dependent federal rights and privileges which, because of DOMA, were previously unavailable to same-sex couples, will now apply to qualifying same-sex married couples.  This change will impact a number of health related employee rights and benefits (for more discussion on other areas of employment law that will be impacted see our article here).  It is therefore critical that employers be aware of which specific areas will be affected and what actions they will need to take to address these changes.

Ramadan Begins – A Reminder for Accommodations

 An employer’s legal obligation to reasonably  accommodate religious practices is not limited to a single religion or a particular time of year.  But, with Ramadan having begun, and running for approximately one month, this is a good time for employers to remember their legal obligations to reasonably accommodate religious practices.

Administration Delays Implementation of ACA Employer Mandate

On July 2, 2013, the Obama administration announced that it will be delaying the implementation of the Affordable Care Act’s mandate that “large” employers either provide health coverage for their employees or pay penalties (commonly known as “the employer mandate”). These requirements, which are a central part of the ACA and which were previously scheduled to go into effect on January 1, 2014, will now be delayed until 2015.

Supreme Court Holds Defense of Marriage Act (DOMA) Unconstitutional

With a 5-4 decision in the case of U.S. v. Windsor (available here), the U.S. Supreme Court has held that the federal Defense of Marriage Act (DOMA) is unconstitutional under Fifth Amendment. DOMA, which was enacted in 1996, established that, for the purposes of all federal laws and programs, “marriage” is defined “only a legal union between one man and one woman as husband and wife” and “spouse” is defined as “only a person of the opposite sex who is a husband or a wife.” The primary impact of DOMA was that any federal rights or privileges dependent on marital status were not available to same-sex couples regardless of whether they were legally married in a state which has legalized same-sex marriage.

Wellness Programs and the Affordable Care Act:

Administration Issues Final Rules on Employment-Based Wellness Program

With the increasing national focus on preventable heath problems, there is growing interest among employers to find ways to promote healthy behavior among their employees as a means of increasing productivity and cutting health costs. Taking another step towards the full implementation of the Affordable Care Act (ACA), the U.S. Departments of Health and Human Services, Labor and Treasury on May 29 issued final rules on employment-based wellness programs (available here). While these regulations maintain the essential elements of the prior wellness program rules adopted in 2006 and 2012 pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the clarifications and modifications they provide will be meaningful for those employers seeking to utilize their health plans to take affirmative measures to incentivize healthy behavior among their employees.

Unpaid Interns a Costly Mistake for Employers?

By former Associate Jack Blum

With the 2008 recession creating a fiercely competitive job market that is still affecting recent college graduates, unpaid internships have become increasingly common as job seekers are willing to forego pay in order to gain experience, references, or anything else that might provide an advantage in finding future employment. For employers also facing tough economic times, this influx of free labor may appear to be an easy way to cut costs and increase profitability. Unfortunately, a recent court ruling underscores that unpaid internships offered by for-profit employers may ultimately cost those employer far more than simply paying the interns in the first place.

No ADA Claim for Maryland Bus Driver

On May 20, 2013, the Court of Appeals of Maryland in Zei v. Maryland Transit Administration, held that a bus operator employed by the Maryland Transit Administration (MTA), and who suffered from cardiovascular disease was, as a matter of law, not a “qualified individual” under the Americans with Disabilities Act (ADA).  In simpler terms, the bus driver was not entitled to the protections of the ADA after his termination for failing to meet physical qualification standards for the job.  The case appears to be the first of its kind in Maryland.  Employers should be aware that federal and state regulations may provide defenses to claims of disability discrimination and may also, in limited circumstances, reduce the need to perform an individualized assessment and to provide a reasonable accommodation.

Ethan Don was published in the June 2013 edition of CPA Practice Management Forum

Ethan Don was recently published in the June 2013 edition of CPA Practice Management Forum. His article entitled "Background Checks: When and How to Use Them" outlines how employers can use background checks effectively while minimizing liability. The full article can be found here.

Maryland Toughens Rules Against Pregnancy Discrimination

On May 16, 2013, a Maryland law was approved which substantially modifies existing protections against pregnancy-related discrimination and appears to create something resembling “most favored nation” status for pregnant workers.  All Maryland employers with more than 15 employees need to pay close attention to the new law because it changes human resource management protocol for dealing with pregnant employees,  requires more posters be displayed in the workplace and mandates modifications to employee handbooks.  The law is scheduled to take effect  October 1, 2013.

Another Setback for NLRB Recess Appointments

By former Associate Jack Blum

The National Labor Relations Board (NLRB) received yet another setback from a federal appellate court on May 16, 2013 as the U.S. Court of Appeals for the Third Circuit, ruling in NLRB v. New Vista Nursing and Rehabilitation, became the second federal appellate court to hold that President Obama’s appointments to the NLRB violated the U.S. Constitution’s Recess Appointment Clause. As if that were not bad enough, the Third Circuit made this ruling not in the context of President Obama’s now-infamous January 2012 “recess” appointments, but in evaluating the legality of former NLRB member Craig Becker’s appointment on March 27, 2010, which occurred during a two-week adjournment of the Senate. It is safe to say that this case dramatically expands the scope of potentially invalid NLRB decisions.

D.C. Circuit Strikes Down NLRB Poster Requirement

By former Associate Jack Blum

On the heels of its ruling that the National Labor Relations Board (NLRB) has lacked a quorum to act since January 3, 2012, the U.S. Court of Appeals for the District of Columbia Circuit again last week rebuked the NLRB by holding that it lacks the authority to require employers to post a notification of employees’ unionization rights on their premises and websites. The NLRB’s poster rule would have required over six million employers across the nation to post an 11 x 17 inch notice informing employees of, among other things, their right to:

NLRB Offers Guidelines on Confidential Investigations

On April 16, 2013, the National Labor Relations Board (NLRB) released an Advice Memorandum with regard to confidential investigations and employees’ rights under Section 7 of the National Labor Relations Act (NLRA). In October 2012, we previously reported on the NLRB’s unprecedented decision in Banner Health Systems, that commonly conducted confidential internal investigations violate employees’ Section 7 rights. That section generally protects both unionized and non-unionized employees’ rights 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.

New Employment Laws Likely in Maryland

By former Associate Jack Blum

2013 has so far been a busy year for the Maryland legislature. While many of the higher profile legislative items—such as gun control, repealing the death penalty, and medical marijuana—may not have a major effect on businesses operating in Maryland, Paley Rothman’s Employment Law Group is committed to analyzing and assisting clients in understanding the latest changes to Maryland’s employment laws.

Each year, a great number of bills get sponsored on a wide variety of employment law issues. This year was no different as the legislature proposed bills restricting enforceability of non-compete agreements, implementing state family medical leave, requiring sick leave policies and mandating a minimum amount of sick leave, enlarging the right of employees to recover attorneys’ fees in lawsuits, establishing that an employee is civilly liable to employer for embezzlement, and more. As is typical, however, few make their way to the Governor or become law.

Circuits Split on Whether Risk of Relapse is a Disability

Departing from precedent, a recent decision by the First Circuit Court of Appeals has posed new questions about the limits to the discretion wielded by plan administrators in interpreting and administering employee benefit plans.

Supreme Court Rejects Class Action Against Comcast

In a decision issued March 27, 2013, the Supreme Court, by a 5-4 vote, rejected an antitrust class action suit filed by Comcast subscribers. The case has clear implications for how employers may defend against class actions.

Paley Rothman’s Employment Law Group Receives Top Honors

We don't often toot our own horn, but we are thrilled that U.S. News & World Report has recognized our employment law and employment litigation work, both nationally and locally in the Washington D.C. metro area. It’s gratifying knowing that we’re ranked as high or higher than the six national firms that received this ranking with us. Check out our rankings here.

Court Finds Restrictive Arbitration Clause Unenforceable

For the many companies that utilize arbitration clauses in their independent contractor agreements or employment agreements, a recent decision from the U.S. District Court for the Eastern District of Virginia serves as an important reminder of the care that must be taken in crafting these provisions. Otherwise, what was meant to provide a cost-savings mechanism for dispute resolution may end up actually increasing litigation expenses significantly. As this case demonstrates, the litigants spent substantial time (and no doubt expense) litigating the enforceability of the arbitration provision even before getting to the merits of the case.

EEOC Sues Toys “R” Us for ADA Discrimination

The Equal Employment Opportunity Commission (EEOC) took a rare action on March 12, 2013, filing suit against Toys “R” Us under the Americans with Disabilities Act (ADA) for failure to provide a reasonable accommodation to, and failure to hire, a profoundly deaf job applicant. The statistics highlight how rare this suit really is: In 2012, the EEOC received 99,412 charges alleging some form of employment discrimination. Of those 99,412 charges, the EEOC brought merit suits in just 122 cases. Only 45 involved ADA claims.

New Rules Extend FMLA Protections for Military Families and Airline Personnel

On Feb. 5, 2013, marking the 20th anniversary of the signing of the Family and Medical Leave Act (FMLA), the Department of Labor issued a long awaited final rule (available here) expanding FMLA protections for military members and their families and airline personnel. The new rule implements the expansion of the FMLA approved by Congress in the National Defense Authorization Act of 2010 and Airline Flight Crew Technical Corrections Act of 2009 (AFCTCA).

VA Senate Approves Employee Misclassification Task Force

Last week, (Jan. 18, 2013) the Senate of Virginia passed a bill to establish an Employee Misclassification Task Force (see SB879 available here). The task force will be comprised of members of various government agencies and will be responsible for, among other things, developing and recommending a clear definition of “employee,” educating workers and employers about misclassification and how to report misclassification, and considering enforcement mechanisms.

D.C. Circuit Invalidates NLRB Recess Appointments

By former Associate Jack Blum

In a groundbreaking decision, the United States Court of Appeals for the District of Columbia Circuit ruled that President Obama’s three “recess” appointments to the National Labor Relations Board (NLRB) on January 4, 2012 were unconstitutional. This decision will have a dramatic practical impact on the field of labor law, which increasingly affects non-union employers, because it leaves the NLRB without a quorum and casts doubt on every one of its actions since January 4, 2012.

“Economic Reality” is Determinative Under Wage Payment and Collection Act

In Campusano v. Lusitano Construction, the Court of Special Appeals of Maryland held for the first time that the economic reality test governs the definition of “employer” under the Wage Payment and Collection Act (WPCA). The test had previously been applied under the Maryland Wage and Hour Law (MWHL) and the Fair Labor Standards Act (FLSA). Here, it was extended so that the Court could determine whether a supervisor or manager could be personally liable under the WPCA in the same manner that a supervisor or manager could be personally liable under the FLSA or MWHL.

Fourth Circuit Decision Highlights Value of At-Will Provisions

A recent decision by the Fourth Circuit Court of Appeals overturning a $555,000 jury verdict has reemphasized the importance and effectiveness of including “at-will” language in employee handbooks and other employment documents. The decision in Scott v. Merck & Company, Inc. (found here), may help to reassure wary employers that an at-will provision is still one of their most valuable tools.

Little Protection If You’re Fired for Being Too Pretty

On December 21, 2012, the Supreme Court of Iowa decided that a female employee, viewed by her male boss as an “irresistible attraction,” and terminated because the boss’s wife perceived the employee as a threat to her marriage, could not state a claim for gender-based discrimination. The case was widely reported by the media, but the decision is not particularly remarkable and, in fact, follows established federal law.

Avoiding ACA Mandate Can Bring Misclassification Woes

By former Associate Jack Blum

The Affordable Care Act (ACA) will require in 2014 that employers with fifty or more full-time employees provide each worker with health insurance or face a potentially steep fine. With the Treasury Department’s recent announcement that employers’ 2013 staffing levels will be used to determine the mandate’s application, yesterday’s Wall Street Journal highlighted one tactic that many small businesses might consider in an effort to avoid the ACA’s employer mandate: hiring independent contractors.