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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.

In nation’s longest-running labor dispute, hotel fights city hall and wins

October 12th, 2009  |  Lisa Milam-Perez

>Municipalities and elected officials frequently inject themselves into local labor disputes, often to the benefit of unions, who focused much of their advocacy efforts on state and local government in the face of a largely hostile environment at the federal level during the Bush years. Employers have responded by challenging such labor-friendly local impulses on federal preemption grounds, citing the National Labor Relations Act to fend off legislative initiatives closer to home that could prove more advantageous to workers than federal law.

In recent weeks, Chicago’s Congress Plaza Hotel—the site of the longest-running strike in the nation—achieved two solid wins in its ongoing labor dispute with Unite Here, the hotel workers’ union, as the NLRA and preemption concerns foiled the union’s efforts to make some inroads in the battle by way of local politics.

Denial of permit on union’s behalf. On September 28, a federal district court in Illinois, in 520 S. Michigan Ave v Fioretti, held the city of Chicago was vicariously liable for a violation of the NLRA by Robert Fioretti, an alderman who refused to issue a permit to the hotel to operate a sidewalk café. The record showed that Fioretti, who had unseated an incumbent in part with union support, made statements both in public and in meetings with union officials suggesting his approval of the operating permit hinged on the hotel’s settling the labor dispute.

The record was devoid of the alderman’s reasons for opposing the permit. However, the court cited Fioretti’s “staunchly pro-Union position,” and noted that he had kept the union president apprised of the status of the hotel’s application and displayed great concern about how the union reacted to his actions on the permit. Based on these facts, the court found Fioretti had impermissibly inserted himself into the collective bargaining process, in violation of the Act. “Fioretti is fully committed to supporting the Union in its strike against the Hotel, which he is entitled to do,” the court wrote. “He cannot, however, use his control over the permit process, the existence of which he so forcefully proclaimed at [a] Union rally, to pressure the Hotel to end the strike.”

Moreover, given its complete delegation of policymaking authority over permit applications to its aldermen, the city was deemed liable, too. The court enjoined the city and the alderman from further interference in the hotel’s negotiations with the union, noting that without injunctive relief, “the Hotel’s positions in the labor dispute and the marketplace will continue to erode.”

No on “right to know.” A union-backed “right to know” ordinance, which would require Chicago hotels to notify guests at the time they book hotel rooms if the hotel is affected by a work stoppage, failed to pass the Chicago City Council last week, with aldermen voting by a narrow margin on October 7 to send the measure back to the council’s finance committee for possible revisions.

Unite Here Local 1 lobbied for the ordinance in hopes of gaining some leverage in ongoing negotiations with the city’s unionized hotels. Contracts expired on August 31 for some 6,000 workers at 30 downtown hotels run by several national hotel chains, and contract negotiations are ongoing but remain far from settled. A strike threat would obviously carry more weight (and a lockout would be fraught with greater danger) if hotels were compelled to notify potential guests of a work stoppage.

Still, the Congress Hotel no doubt was a key target of the right-to-know measure. Workers have been picketing the hotel for six years; according to Local 1, more than 1,000 customers have complained about the hotel since the strike began. The proposed ordinance would provide a cause of action against a hotel by guests who were not properly notified of a strike or lockout involving at least 20 employees lasting 15 days or more. Chicago hotels would have to alert guests of the work stoppage before they make reservations, over the phone and in all printed and electronic communications. And notice would have to be made through third parties such as travel agents and online travel reservation websites as well.

Unite Here had campaigned for the ordinance in 2005, but the measure lost by five votes, in part due to concerns over whether the NLRA preempted such legislation. In its most recent round, the proposed ordinance won the backing of the finance committee in August by a 16-3 vote, but it could not get past a deadlocked full city council, at least for now. The Congress Hotel has indicated it will file a lawsuit to challenge the ordinance if it passes.

If the hotel’s recent victories are any measure, employers that are embroiled in labor disputes in union-friendly municipalities increasingly will find they can fight city hall—much to labor’s chagrin.

Real world is in the eye of the age-bias beholder

October 9th, 2009  |  Pamela Wolf

>Testimony heard by the Senate Judiciary Committee on October 7 reveals striking differences as to the “real world” impact of the sharply divided Supreme Court’s decision in Gross v FBL Fin Servs Inc. The Court held that a plaintiff claiming disparate treatment under the Age Discrimination in Employment Act (ADEA) must establish by preponderance of evidence that age was the “but for” cause of the adverse employment action challenged, not just one motivating factor.

This is a tougher standard to meet than that permitted under a “mixed-motive” theory that is applied in cases brought under Title VII of the Civil Rights Act of 1964 for other types of discrimination. In a Title VII “mixed-motive” case, when a plaintiff has produced evidence that a protected category, such as race, sex or religion, was one motivating factor in an employer’s adverse-employment decision, the burden of persuasion shifts to the employer to show that it would have taken the same action regardless of the protected factor. The Court in Gross foreclosed this mixed-motive route to proving bias in ADEA cases.

What is the “real world” impact of the decision? Several witnesses testified during the Judiciary Committee’s hearing on Workplace Fairness: Has the Supreme Court Been Misinterpreting Laws Designed to Protect American Workers from Discrimination?

Jack Gross, the plaintiff who, at age 54 – after working for his employer for 32 years – was reassigned to a position he considered a demotion, was one of the witnesses who testified. Here’s part of the “real world” scenario he described:

I feel like my case has been hijacked by the [H]igh [C]ourt for the sole purpose of rewriting both the letter and the spirit of the ADEA. I am against activist judges, from either party, who use their personal ideology to misinterpret the law as intended. I am especially mortified when the only people (judges) who are immune from age discrimination vis-a-vis their lifetime appointments, can rewrite laws that are designed to protect people in the “real” world. (Emphasis added)

On the other had, referring to the potential choices facing the Supreme Court in Gross, attorney Michael W. Fox, a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart, PC, characterized the choice ultimately made by the High Court as one that adopts “a more common sense rule, that in reality does little to alter the real world of age discrimination litigation.” (Emphasis added)

Does Gross change the age-bias landscape? As Jack Gross points out: “Headline after headline [has] proclaimed that it is now easier for employers to discriminate based on age, following the decision in my case.” And he’s not happy about being the person who set the wheels in motion. “I am not at all comfortable with having my name associated with a decision that is now causing pain to other employees in my age bracket simply because I took a stand seven years ago,” he said. “And, as expected, my employer is pushing for a new trial as quickly as possible to take advantage of the new court-made law before it can be corrected.”

That’s the “real world” litigation landscape for Jack Gross.

But the High Court’s decision may have a less than dramatic impact at trial. Fox pointed out that the burden-shifting framework used in mixed-motive cases is confusing for juries. “Lawyers representing plaintiffs rely much more on established pretext doctrines under McDonnell Douglas, rather than try for a mixed-motive analysis,” he observed. “In short, in many respects the dispute engendered by Gross is more academic than real world.” (Emphasis added)

Fox may be right about juries. Showing jurors that the reason given by an employer for an adverse employment action was really just a pretextual ruse to conceal age bias may be easier than relying on a mixed-motive theory that is conceptually difficult for jurors to understand and apply.

But what about the impact at the summary judgment stage of litigation? Employers defending against ADEA claims appear to have a better chance of obtaining summary judgment in their favor in the wake of Gross. Employers can prevail by showing there is no material fact question that the challenged adverse action was motivated by at least one legitimate, nonbiased reason – even when discrimination has been shown. In contrast, since plaintiffs will now be required to produce enough evidence to show that age was the only reason that motivated the action, they seem less likely to make it to trial.

Congressional action. Attorney Fox urged lawmakers to refrain from acting too swiftly. “Congressional action to reverse Gross, particularly without waiting to determine if in fact there is any real world impact would be short sighted [a]nd potentially provide a ‘cure’ with adverse consequences that would far outweigh the alleged evils being remedied,” he cautioned. (Emphasis added)

It seems unlikely that Congress will wait for news of any “real world” impact. The day before the Senate Judiciary hearing, Chairmen Tom Harkin (Iowa) of the Senate Health, Education, Labor and Pensions Committee, Patrick Leahy (Vt) of the Senate Judiciary Committee, and Congressman George Miller (Cal) of the House Education and Labor Committee introduced the Protecting Older Workers Against Discrimination Act with the goal of reversing the Gross decision and restoring civil rights protections for older workers.

Modernization of OFCCP requirements for federal construction contractors is an emerging concern

October 7th, 2009  |  Cynthia L. Hackerott

>After decades of virtual obscurity, the OFCCP compliance obligations of federal construction contractors are receiving renewed attention. Earlier this year, the OFCCP announced that it will place a special emphasis on the construction industry when implementing its initiative to conduct audits of federal contractors in receipt of Recovery Act funds (because the majority, estimated at roughly 80%, of Recovery Act contractors will be recipients of direct or federally assisted funds for construction projects).

This past July, during a presentation at the 27th Annual Industry Liaison Group National Conference in Atlanta, OFCCP expert John Fox (attorney and partner at Manatt, Phelps & Phillips in Palo Alto, California) noted that the OFCCP’s construction program “has not been updated or addressed in 30 years and now is in need of a top to bottom review.” In September, Congressman Pete Stark (D-CA) and Congresswoman Rosa L. DeLauro (D-CT) sent a letter co-signed by 24 of their colleagues urging Secretary of Labor Hilda Solis to re-evaluate the affirmative action goals for women with regard to federal construction contractors set by the OFCCP in the agency’s regulations implementing Executive Order 11246. According to a joint September 18, 2009 statement corresponding with the letter, the representatives believe the OFCCP should “modernize” its affirmative action goals “to reflect the realities of female participation in the construction industry today.” The representatives pointed out that the current 6.9% participation goal for women was based on data from the 1970 Census and has been left on “indefinite extension” status since 1980.

The EEO and affirmative action obligations of federal contractors and subcontractors who hold construction contracts differ in significant ways from that of supply and service contractors. Covered federal construction contractors must comply with Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), while federally assisted construction contractors must comply with Executive Order 11246 only.

In order to take into account the fluid and temporary nature of the construction workforce, the OFCCP does not require construction contractors to develop written affirmative action programs (which is a requirement for covered supply and service contractors). Instead, the OFCCP has established utilization goals based on civilian labor force participation rates, and has outlined in its regulations (at 41 CFR Section 60-4.3(a) ) 16 good-faith steps that construction contractors must take in order to increase the utilization of minorities and women in the skilled trades. (Note that the goals are not a requirement for quotas, which are specifically prohibited by law.) However, the OFCCP’s regulations on construction contractors obligations have not been updated since 1980, and, likewise, the utilization goals have not been updated for decades.

Thus, updating the equal employment opportunity and affirmative action requirements to reflect the current landscape pertaining to federal construction contractors should be one of many new developments coming from the OFCCP now that Patricia A. Shiu has taken the helm as Director.