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Archive for the ‘Employment Law Blog (US)’ Category

Employee Claim is Scattered, Smothered, and Covered by Waffle House Arbitration Agreement

Posted on: October 19th, 2017

By: Brad Adler and Will Collins

A recent Georgia Court of Appeals case not only reinforced that state law permits the Federal Arbitration Act (“FAA”) to control arbitration agreements, but also illustrated that state law broadly interprets and defines claims arising from employment when determining whether a claim is covered by an arbitration agreement. In Waffle House, Inc. v. Pavesi, 2017 Ga. App. LEXIS 442, No. A17A1281 (October 4, 2017) the Georgia Court of Appeals held that an employee’s personal injury claims for negligent hiring, supervision, and retention of a co-worker were all covered claims subject to mandatory arbitration under the arbitration agreement signed by the employee because: (1) the agreement showed intent to be governed by the FAA and that intent was not destroyed by merely referencing that the agreement is governed by Georgia law; and (2) the agreement covered the claims arising out of employment and, under Georgia law, this language is interpreted broadly such that “nothing more than a causal connection is required to show that a claim arose out of that relationship.”

In October of 2015, the Waffle House franchise where the complainant, Brian Mikeals, worked was re-purchased from the franchisee by Waffle House, Inc. At that time, all employees were required to re-apply for non-probationary employment and complete on-boarding paperwork, including an arbitration agreement. Mikeals entered into the arbitration agreement on November 6, 2015 and again on November 14, 2015, due to a problem in the Waffle House computer system requiring employees to complete the paperwork for a second time.

In December of 2015, Mikeals suffered a severe injury at work after a co-worker placed an illegal substance in his drink. After Mikeals’ court appointed guardian initiated this suit, Waffle House filed an emergency motion to compel arbitration. The trial court denied the motion; however, the Court of Appeals reversed.

First, where the agreement stated that it “should be construed in a manner consistent with the principles and provisions of the Federal Arbitration Act … [T]his Agreement shall be governed by and interpreted in accordance with the laws of the State of Georgia” the Court of Appeals found that the language demonstrated the parties’ intent to be bound by the FAA. Contrary to the trial court, the Court of Appeals concluded that the passing reference to a Georgia choice of law provision did not transform the intent of the parties to be subject to the Georgia Arbitration Code. Instead, the court emphasized that Georgia law permits the parties to agree to arbitrate claims and elect that such arbitration will be governed by the FAA.

Second, the court reinforced the broad application and coverage of claims arising from an employment relationship. Here, the arbitration agreement covered all claims “arising out of any aspect of or pertaining in any way to [Mikaels’] employment” and included specific language listing tort claims as covered. Before even discussing that the claims in this case were tort claims that the agreement expressly covers, the court emphasized that it has a long history of broadly including claims arising from a special relationship, requiring “nothing more than a causal connection . . . to show that a claim arose out of that relationship.” According to the court, the only claims that do not arise out of an employment relationship are those “which do not have any relationship to an employee’s work or relationship to the employer.” So, the bottom line is that this decision reinforces the need to be deliberate and wise in drafting an arbitration clause and further highlights a tendency in many courts to view an arbitration provision with a wide lens.

If you have questions or would like more information, please contact Brad Adler at [email protected] or Will Collins at [email protected].

Federal Circuit Scorecard – Title VII & Sexual Orientation Discrimination

Posted on: October 13th, 2017

By: Michael M. Hill

A Georgia case is in the running to be the one the Supreme Court uses to resolve the question of whether Title VII of the Civil Rights Act of 1964 (which prohibits employment discrimination on the basis of sex and certain other characteristics) also includes discrimination on the basis of sexual orientation. The Supreme Court is widely expected to take on this issue at some point, but no one knows exactly when or which case it will be.

In Evans v. Georgia Regional Hospital, 850 F.3d 1248 (11th Cir. 2017), a former hospital security guard alleged she was harassed and otherwise discriminated against at work because of her homosexual orientation and gender non-conformity.  While the trial court dismissed her case, the Eleventh Circuit Court of Appeals partially reversed.  The Eleventh Circuit held that Evans should be given a chance to amend her gender non-conformity claim, but it affirmed dismissal of her sexual orientation claim.

The issue, in most federal circuits, is a distinction between (1) claims of discrimination on the basis of gender stereotypes (e.g., for a woman being insufficiently feminine), which the Supreme Court has held is discrimination based on sex, and (2) claims of discrimination based on sexual orientation, which all but one federal circuit has held is not discrimination based on sex.

At present, this is how things stand now:

  • In the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin), sexual orientation discrimination does violate Title VII.
  • In every other federal circuit, sexual orientation discrimination does not violate Title VII.
  • But no matter where you are, the U.S. Equal Employment Opportunity Commission (EEOC) takes the position that sexual orientation discrimination does violate Title VII.

To make matters more confusing, the full court of the Second Circuit (which covers New York, Connecticut, and Vermont) is considering whether to affirm its past position that sexual orientation is not protected by Title VII or to join the Seventh Circuit. In that case, the EEOC of course is arguing that sexual orientation is a protected category, but the U.S. Department of Justice has filed an amicus brief to argue that sexual orientation is not protected.  In the words of the Department of Justice, “the EEOC is not speaking for the United States.”

The long and short of it is that, until the Supreme Court weighs in, employers need to be mindful of the federal law as interpreted in their circuit, while also understanding that the EEOC enforces its position nationwide whether or not the local federal circuit agrees with it.

If you have any questions or would like more information, please contact Michael M. Hill at [email protected].

Updates on the “Joint Employer” Standard

Posted on: October 10th, 2017

By: Tim Holdsworth

More than two years have passed since the National Labor Relations Board (“NLRB”) handed down its new and controversial joint employer standard in Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). As you may recall, that decision greatly expanded the standard under which an entity could be found as a joint employer under the National Labor Relations Act (“NLRA”). In departing from its own well-established standards, the NLRB announced that they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. They also announced they will no longer require the employer’s control to be exercised directly and immediately. Instead, the NLRB declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

The U.S. Department of Labor (“DOL”) adopted a similar standard for who it considered a “joint employer” under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act shortly thereafter.

Neither of these controversial steps has fared well. The Browning-Ferris decision has been under attack in courts, while the DOL rescinded its guidance earlier this year under new Labor Secretary Alex Acosta.

Legislative efforts also have been made to give further guidance to businesses that have struggled with the uncertain and convoluted joint employer scheme. Recently, the U.S. House of Representatives Education and Workforce Committee approved a bill that would amend both the NLRA and FLSA to require that a company exert “direct, actual and immediate” control over workers to be considered an employer.

We will continue to monitor this legislation and provide any updates. For now, however, employers need to know that the Browning-Ferris standard is still in effect.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

Third Circuit Reminds Employers To Draft Compromise Agreements Carefully

Posted on: October 6th, 2017

By: Mark C. Stephenson

On August 12, 2104, Craig Zuber suffered a work-related injury, and then filed a workers’ compensation claim and took medical leave. He returned to work on August 14 and requested a further week of medical leave on August 17, 2014, which was granted. Zuber returned to work on August 26. On September 10, department chain Boscov’s fired Zuber. Six months later, on April 8, 2015 Zuber signed a Compromise and Release Agreement before the PA Department of Labor and Industry Workers’ Compensation office. In response, Zuber sued under the FMLA and Pennsylvania common law, which the federal district court dismissed based on the agreement’s express terms.

Boscov’s countered by contending that Zuber’s suit was barred as the result of the compromise reached in the state administrative proceeding. The agreement stated that “Employer and Employee intend for the [Agreement] to be a full and final resolution of all aspects of the … alleged work injury claim and its sequela whether known or unknown at this time.” The agreement further stated that “Employee is forever relinquishing any and all rights to seek any and all past, present and/or future benefits in connection with the alleged work injury,” and required the Employee to acknowledge that if the agreement were to be approved by a workers’ compensation judge, his claim would be closed forever and that his appellate rights waived.

Looking to solely to contract law, the Third Circuit rejected Boscov’s expansive reading of the agreement’s waiver provision as well beyond the contemplation of the parties in reaching their compromise of claims. Boscov’s argued that the term “sequela,” commonly understood as a medical term referencing the aftermath of sickness or injury, encompassed any and all rights that Zuber may have had to maintain a legal claim against the Employer arising from his work injury, no matter how distantly. The Third Circuit found support in its narrow reading of the agreement in the document’s structure, which was expressly stated to address Zuber’s work-related injuries only, and a common sense reading of the workers compensation case release and its limited purpose.

The decision serves as a useful cautionary warning to employers to be clear when stating what rights employees waive when compromising their claims. Here, post hoc, Boscov’s tried and failed to recast a limited agreement into a global resolution of claims between the parties. The Third Circuit makes clear that it will not allow employers to beat a narrow shield secured in settling a lesser claim into a broad sword to defeat an employee’s ensuing claims that are well outside the intended scope of the parties’ compromise.

If you have any questions or would like more information, please contact Mark C. Stephenson at [email protected].

 

Extended Medical Leave Held Not Reasonable Accommodation Under ADA

Posted on: October 2nd, 2017

By: Amy C. Bender

Accommodations for disabled workers, and particularly requests for medical leave, continue to present challenges for employers. Who is considered disabled? Do I have to provide employees additional time off work after FMLA, other statutory leave entitlements, and PTO have been exhausted? If so, how much leave do I need to provide? How will I cover the employees’ duties during the absence? If I give additional time off to one employee, will I have to do it for everyone? The questions seem endless.

Fortunately for employers, a recent federal court decision has held that a multi-month medical leave of absence is not a reasonable accommodation under the Americans with Disabilities Act. The court reasoned that the ADA is not a medical leave statute, but rather is intended to prohibit discrimination against qualified individuals with disabilities and to require reasonable adjustments to jobs to enable those employees to perform their essential job functions. By contrast, an extended medical leave does not help a disabled worker perform the job, but rather excuses the inability to work, and thus is not a “reasonable” accommodation. The court noted that a short-term leave of a couple days or even a couple weeks may be a reasonable accommodation, depending on the circumstances. There is no bright line between “short-term” and “long-term” leave, and of course, the facts of each situation will vary. However, the case signals good news for employers by placing some limitation on the ever-increasing accommodation obligation. The decision may be read here.

FMG’s Labor and Employment Law team can assist your organization in responding to accommodation requests, defending ADA claims for failure to provide an accommodation, and implementing effective discrimination and accommodation policies and strategy.

If you have any questions or would like more information, please contact Amy C. Bender at [email protected].