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Inouye, defense contractors to assault victims: “Not so fast”

October 22nd, 2009  |  Matt Pavich

>Updating an earlier series of blogs, it has been reported recently that an amendment that would prevent the government from working with contractors who blocked the access of assault victims to the courts may be watered down or ripped out entirely from a larger defense appropriations bill.

According to the Huffington Post, Senator Daniel Inouye, (D-Hi), a career recipient of $294,000 from the same defense and aerospace contractors who would benefit from the Senator’s decision, is considering removing or weakening the provision offered by Sen. Al Franken (D-Minn.) and passed by the Senate 68-30.

The report says that the contractors are “putting on a full-court press on this amendment.” Why, you ask? Apparently, the contractors are concerned that the language in the Franken amendment would leave them overly exposed to lawsuits and would pose an ongoing risk that their lucrative contracts might dry up.

Rather than attempt to bridge the divide between those who believe that victims of rape should have their day in court, regardless of arbitration agreements they may have signed and those who don’t, the Senate is considering removing the Title VII claim provision, thereby preventing victims of assault or rape to bring suit against the employer who may have contributed to their assault.

What could be done to stop this? Well, very little apparently. Since Inouye chairs the committee responsible for the bill, he can simply remove the provision and no one can prevent it. So, chalk up another victory for the power of money in politics and, if you’re so inclined, spare a thought for employees who, it appears likely, will be unable to receive their day in court if they happen to be assaulted while in the employ of firms that mandate arbitration agreements.

Make no mistake, in the end, that’s what this fight is about. Employers like Halliburton will fight tooth and nail to avoid having to litigate such cases and little wonder why; it’s cheaper to arbitrate, the awards are substantially lower and the employee is still the David facing off against the Goliath, only less well-armed. If Inouye strips the provision, it appears that $294,000 goes along way towards taking the slingshot out of David’s hand.

Colorado minimum wage drops along with cost of living

October 21st, 2009  |  Connie Eyer


In an attempt to ensure that wages of low-income workers were kept in line with the cost of living, Coloradoans voted in 2006 to be one of 10 states (the others are Arizona, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington) that ties its minimum wage to inflation. However, due to a decrease in the inflation rate during the first half of 2009, the Centennial State will become the first to lower its current hourly minimum—from $7.28 to $7.24—on January 1, 2010. For tipped workers in Colorado, the minimum will go from $4.26 per hour to $4.22 per hour, an amount above the federal minimum for tipped income of $2.13 an hour.

The rate is recalibrated each year based on the Denver-Boulder-Greeley Consumer Price Index, which fell 0.6 percent between the first half of 2008 and the first half of 2009. Last year, that index rose 3.9 percent, but it is now on track to record its first annual decline since its start in 1965.

As reported in the New York Times, Rich Jones, director of policy and research at the Bell Policy Center, noted that voters had approved the change because the federal minimum wage had not risen for years and Colorado’s inflation rates had remained relatively steady.

For a full-time worker, going from $7.28 to the federal hourly minimum will result in a loss of $62.40 in income during the course of a year.

Noting that “it’s not a lot of money, but for the people who are working for minimum wage, it means lot to them,” Jones said he hoped employers would focus more on maintaining goodwill with their workers rather than lowering wages because they can.

The state Division of Labor will hold a public hearing on its minimum wage order at 9:30 a.m. November 6 at its offices, 633 17th St., Suite 200 in Denver. The division is also accepting comments until November 9.

Pay-for-Performance program hits the dustbin of history

October 19th, 2009  |  Matt Pavich


Another day and another Bush administration program goes out the window.

Congress has decided to repeal the National Security Personnel System as part of a compromise between the House and Senate in their negotiations over the Defense Department authorization bill. Under the bill, the Department of Defense would have six months to start transferring affected employees back to whatever pay system they originally fell under, with the system finally ending on January 1, 2012. The Department would also have to submit proposals for any new pay-for-performance system to Congress for approval.

In true Washington style, the bill calls for the institution of a system that would determine bonuses and other performance-based actions for all Defense employees. Of course, it doesn’t offer details on how that system might work. Don’t worry, though, federal employee unions are ready to assist. American Federation of Government Employees President John Gage, who said he was “elated” over the program’s end, said he would work with the Pentagon to create the new system.

George W. Bush’s administration strongly advocated for NSPS, and Congress approved the system for Pentagon employees in 2003. Roughly 30 percent of the Defense Department’s civilian employees now fall under NSPS jurisdiction, according to the Pentagon.

The belief was that the program would improve government efficiency. But, as is so often the case with government programs, especially those designed to increase efficiency, the devil was in the details. The kind of details found in, say, agency budgets.

Federal managers found it nearly impossible to truly link pay to performance because their personnel budget cupboards were bare. A manager with 15 employees doing excellent work might only have had money to pay five the raises they deserve.

Other employees complained that the system favored cronyism and punished competence. Some managers were accused of using the system to reward friends, while others were accused of not even knowing how to use the system.

While analysts suggest various options for the Pentagon, John Berry, the OPM director, has said he prefers a single, government-wide pay system, but acknowledges that creating such a plan could be difficult.

Snuffing out smoking…one business at a time

October 16th, 2009  |  Lucas Otto

>As federal anti-smoking laws have gone into effect, several states have followed suit and banned smoking in many establishments. While many businesses have cried foul over these bans, citing the fact that they will lose customers, the over-arching mantra of backers of these bans is the health benefits. However, these “bans” have had the “unintended” effect of creating a small sect of popular businesses: smoking lounges.

This is not a real shocking occurrence because, as is often the case, when the door of one business opportunity closes, the window to another often seems to open. Yet, now these businesses, their employees and customers are facing closure as localities begin to institute their own set of smoking prohibitions. Take the Village of Worth, Illinois, where board members recently voted to extend Illinois’ anti-smoking laws to include businesses in the “business” of providing smokers a place to congregate. In Worth’s path are four indoor smoking lounges that will be forced to shut their doors, its employees will be out of work, and its customers will be out of a place to go to enjoy tobacco.

Illinois law states that smoking is allowed in retail tobacco stores (410 ILCS 82/35); however these “stores” only include:

an enclosed workplace that…distributes tobacco or tobacco products, when, as a necessary and integral part of the process of making, manufacturing, importing, or distributing a tobacco product for the eventual retail sale of that tobacco or tobacco product, tobacco is heated, burned, or smoked, or a lighted tobacco product is tested, provided that the involved business entity: (1) maintains a specially designated area or areas within the workplace for the purpose of the heating, burning, smoking, or lighting activities, and does not create a facility that permits smoking throughout (410 ILCS 82/10).

So, what’s the big deal? Smoking is bad for our health, right? So why not shut down places that provide a smoking haven? Well, while those sentiments may have some truth, it misses the point. The fact is, just look around at the local strip malls and you will see monuments to our fledgling economy: the empty store. These vestiges once housed businesses, and these businesses made money and employed people, many of the same people that populate unemployment lines. And yet, here we have a new kind of small business that seems to being doing well, but it, too, must shut down, its owners now out of a business, and its employees now to join the ranks of the unemployed—not because of the bad economy or lousy sales but, rather, because of what is being sold and used at the business by its patrons.

Now, for a lot of people, smoking is seen as a deplorable habit, and as a nonsmoker, I might agree. However, it is not illegal to smoke, and shutting down local businesses, especially in these poor economic times, does not seem to make the most business sense. It certainly makes one wonder if this is an unintended net result of the Illinois smoking ban. Yet, officials, like those in the Village of Worth, are in their positions in order to aid and protect its inhabitants, so maybe this ban’s “worth” to its citizens outweighs any detriments.

The fact is, it stands to reason that if one small town can do this, then several others, maybe even whole states, will probably follow suit. Smoking is certainly an important public health issue that needs to be continually dealt with, maybe at all costs, but just don’t tell that to the owners of these smoking lounges, or their out-of-work employees.

“I thought my employees had to actually use their FMLA leave before they could sue me…”

October 14th, 2009  |  Deborah Hammonds

>If you’re an employer who believes their employees must first “use” their FMLA leave in order to advance an actionable claim…think again. In Erdman v Nationwide Ins Co, a case that broadens the scope of the FMLA, the Third Circuit held that employees invoke their FMLA rights, not at the time their leave begins, but when they request the leave, which means that requests alone can form the basis of an interference or reprisal claim, even if the leave is not yet taken.

The employee, Brenda Erdman, initially requested vacation time to prepare her child with Down Syndrome for school. When her vacation bid was denied, she then requested FMLA leave for that same period. Approximately one month after requesting FMLA leave, but before she took the leave, Erdman was discharged for purported behavioral problems. Her employer, Nationwide Insurance, asserted that she used profanity during a telephone conversation that was monitored for quality control purposes. However, Erdman claimed she made a personal call, and, according to company policy, personal calls were not monitored. Filing suit under the FMLA, Erdman alleged that her employer’s motives for discharging her were pretextual, and she was actually fired for requesting FMLA leave. The district court granted summary judgment to the Nationwide on the grounds that Erdman had not met the 1,250-hour threshold to be eligible for leave under the FMLA.

First addressing Erdman’s eligibility for FMLA leave, the Third Circuit held that she presented a genuine issue of material fact as to whether Nationwide had notice that she worked at least 1,250 hours. Erdman had worked extra hours from home, accruing “comp” time, until her supervisor told her that she could no longer do so, determined the Third Circuit, and the district court excluded those hours from the 1,250-hour threshold. The additional hours made her eligible for FMLA leave for the purposes of summary judgment.

As to whether Erdman stated actionable FMLA claims, the Third Circuit held that employees need not begin their FMLA leave to establish interference or reprisals claims under the Act. The court wrote that “it would be patently absurd if an employer who wished to punish an employee for taking FMLA leave could avoid liability simply by firing the employee before the leave begins.” Reviewing the FMLA’s interference and reprisal provisions, the circuit court interpreted “the requirement that an employee ‘take’ FMLA leave to connote invocation of FMLA rights, not actual commencement of leave.” Therefore, firing an employee for making a “valid request for FMLA leave may constitute interference with the employee’s FMLA rights as well as retaliation against the employee” under the FMLA, held the Third Circuit, remanding the case back to the district court to determine if unlawful interference or retaliation occurred.

The bottom line. The Third Circuit’s decision makes clear that employees don’t have to “begin” their FMLA leave in order to advance actionable interference and reprisal claims under the Act; they need only “request” FMLA leave in order to advance such claims. Of course, there still has to be some sort of causal connection between the employee’s request for leave and the employer’s adverse employment action. It also wouldn’t hurt for employers to state in a written policy whether extra hours worked outside the office count towards the 1,250-hour threshold for employees to be considered an “eligible” employee under the FMLA, or to simply have a policy prohibiting “off-the-clock” work altogether.