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How to react to marijuana use by employees without getting sued

May 31st, 2017  |  Lorene Park  |  Add a Comment

By Lorene D. Park, J.D.

According to the National Conference of State Legislatures (NCSL), 29 states, the District of Columbia, Guam, and Puerto Rico currently allow for the medical use of marijuana and have comprehensive programs providing protection from criminal penalties and, in some states, from employment discrimination. Other states have more limited laws, in terms of dosage, protections for medical use, or use with respect to only certain types of health conditions. (For recent proposals, see Eight of nine states appear to have approved marijuana-related ballot proposals.)

After reviewing many of these laws, as well as articles and court decisions discussing them, I concluded two things. First, courts and commentators alike seem overly fond of quoting from songs and movies themed around getting high. Second, there are a few trends in the laws and cases that can provide some guidance to employers. Most importantly, state medical marijuana laws generally do not relate directly to workplace drug testing and do not require employers to accommodate marijuana use on duty. In addition, state laws that prohibit discrimination based on after-hours marijuana use make exceptions where the level of THC (the active ingredient in marijuana) in the blood is high enough to impair an employee while at work.

The following examples from recent cases also provide guidance on typical claims, including: plain violations of a medical marijuana statute; disability discrimination; inconsistently enforced drug policies (allegedly due to age or race discrimination); and tort claims based on how a test is conducted (negligence) or based on the dissemination of results (defamation).

Violation of medical marijuana statute

Marijuana is still an illegal drug under the federal Controlled Substances Act, and the prior administration’s policy of letting state and local authorities address marijuana use may not be followed by the Trump administration. Nonetheless, more states have enacted laws authorizing the production, distribution, and possession (in small amounts) of marijuana for medical use and in some cases recreational use. Some states have laws that specifically prohibit employers from taking adverse employment actions based on employees’ use of medical marijuana (though, again, no state requires condoning the use, or being under the influence, while on duty). So how does a case based on a statutory violation look? Consider a recent case from Rhode Island.

After pondering the challenges posed by the legalization of marijuana, a Rhode Island superior court held that Darlington Fabrics violated the state’s Hawkins-Slater Act by refusing to hire an intern because she held a medical marijuana card. The statute, Section 21-28.6-4(d), states: “No school, employer, or landlord may refuse to enroll, employ, or lease to, or otherwise penalize, a person solely for his or her status as a cardholder.” The applicant disclosed she had the card and said yes when asked if she currently used medical marijuana. She explained she was allergic to other painkillers and assured the employer she would not use marijuana at work or bring it to work, but she was denied the position. After finding that the Act provides for a private right of action, the court held that Darlington violated the law because it denied employment based on a belief that the applicant would not pass its drug screen. While the Act does not require an employer to accommodate medical use of marijuana in the workplace, the plaintiff was rejected for using marijuana outside the workplace. She was therefore granted summary judgment.

No preemption. It is worth noting that Darlington Fabrics also raised a preemption challenge to the Rhode Island law based on the federal Controlled Substance Act. Finding no preemption, the superior court explained that the purpose of the CSA, concerning the “illegal importation, manufacture, distribution, and possession and improper use of controlled substances,” was “quite distant from the realm of employment and anti-discrimination law.” It also pointed out that, when it comes to the use of medical marijuana, “Congress seems to want, as Justice Brandeis said, the States to be the laboratories of democracy” (Callaghan v. Darlington Fabrics, Corp.).

Disability discrimination

Medical marijuana cases also often feature claims employers used medicinal marijuana cards or use as a pretext for taking an adverse action based on the disability for which the employee was prescribed marijuana. In the Callaghan case above, the court also ruled that the plaintiff stated a claim of disability discrimination under state law, even though the employer claimed she never disclosed the condition for which she was prescribed marijuana (migraine headaches). The court found it undisputed the employer knew she was disabled—otherwise she would not have had a medical marijuana card.

Similarly, in a recent case out of the District of Columbia, a federal court refused to dismiss a discrimination claim by a medical marijuana user who was fired from his job at a supermarket after testing positive for marijuana. Although he might ultimately “face an uphill climb” in proving discrimination, the court found that he raised a plausible inference he was terminated because of his glaucoma (for which he was prescribed marijuana), rather than because of his positive drug screen, especially because he alleged another employee who tested positive for drugs was not fired (Coles v. Harris Teeter, LLC).

Again, keep in mind, it is okay to have workplace anti-drug policies and to prohibit the use of marijuana or being under its influence while working. Indeed, many of the state marijuana laws and several court decisions specifically provide that employers do not have to accommodate an individual’s medical marijuana use at work. It is the after-hours use that employers in medical marijuana states cannot use as a basis for termination or other adverse action.

Inconsistent enforcement of drug policy

And whatever you do, be consistent in enforcement; otherwise, your anti-drug policy may be considered a pretext. Realistically, the inconsistent enforcement of any employment policy that has an adverse effect on an individual or group of individuals is going to raise questions as to why. In the marijuana context, it is employers’ inconsistent enforcement of anti-drug or “zero tolerance” drug policies.

Consistent enforcement is not a problem. For example, a licensed medical marijuana caregiver caught up in a restaurant’s investigation of other employees for suspected drug dealing could not show the restaurant’s stated reason for firing her (she admitted giving medical marijuana to a coworker and a witness testified she sold drugs on the premises), alongside the others, was pretext for age discrimination under Michigan’s Elliott-Larsen Civil Rights Act. The federal court noted that the employee handbook strictly prohibited the “illegal use, sale, or possession of narcotics, drugs, or controlled substances while on the job or on Company property,” and despite the employee’s state medical marijuana card and license, marijuana remains illegal under federal law (Henry v. Outback Steakhouse of Florida, LLC).

In another case, an African-American truck driver who claimed he was not hired after he tested positive for marijuana had his Title VII race discrimination claim tossed because it was undisputed that the company did not hire individuals who test positive for marijuana, and he offered no evidence that the first test was unreliable or that a second drug test would have come out negative. Nor was the employer’s reporting the result to the state racially motivated because reports of positive results were made as a matter of routine, affirmed the Seventh Circuit (Turner v. Hirschbach Motor Lines). Likewise, a federal court in Pennsylvania found no evidence supporting federal and state-law race discrimination claims where an employer fired all eight employees who either failed or admitted that they would not pass a drug test. The employer investigated after a hotline call that specifically identified the plaintiff as having sold marijuana at work (Butler v. Arctic Glacier USA).

Tort claims

Any supervisor, decisionmaker, or individual who investigates suspected violations of a workplace drug-use policy should be trained on privacy-related claims such as false light and intrusion upon seclusion claims, as well as defamation, emotional distress, and other claims that can arise in this context. For example, a registered medical marijuana cardholder in California was fired by Kohl’s after he applied for workers’ comp and tested positive for marijuana. Although he told the HR director he was not under the influence at work and only used marijuana in connection with his anxiety diagnosis, she purportedly said, “You should have chosen a different medication.” He will take his defamation claim to trial based on Kohl’s statements in a termination form that he tested positive and violated three policies, including reporting to work in a condition unfit to perform his duties. Based on evidence that marijuana is detectable in urine for up to 30 days but impairment lasts only hours, and based on the employee’s declaration that he did not use the medicine within several days of working and had not used marijuana for several days before his injury, a jury could find he was not in an unfit condition or under the influence at work. It could also find that Kohl’s statements were made with a “reckless or wanton disregard for the truth” (Shepherd v. Kohl’s Department Stores, Inc.).

One interesting type of defamation claim, which an emerging majority of state courts appear to be rejecting, involves “compelled self-defamation”—meaning an individual would be forced to disclose why he or she left a prior position, even if the individual believed it was based on an erroneous positive drug result. A recent example of this comes from a case filed by a technician who worked for an Exxon contractor in Texas and who was put on “inactive” status after testing positive for marijuana. Though he prevailed before the appeals court on his compelled self-defamation, discrimination, and tort claims arising from that employment decision, the Texas Supreme Court reversed and rendered judgment for the defendants, holding that there is no claim for compelled self-defamation under Texas law.

The discrimination claim against the employer failed for lack of valid non-Hispanic comparators, and his tort claims against Exxon failed because the mere fact that Exxon had contractual substance abuse program requirements for the plaintiff’s employer did not establish the requisite control by Exxon over the third-party drug screening company used by the employer, nor was it evidence of tortious inference with employment (Exxon Mobil Corp. v. Rincones).

How to avoid getting sued . . . or at least liability

Based on the foregoing, there are a few points to keep in mind when trying to avoid liability:

  • Tailor your zero-tolerance policy to comply with laws applicable in your jurisdiction, focusing on promoting a safe, healthy, and productive work environment. Consider including an at-will disclaimer, details on the logistics of drug tests (where done; who pays), and a consent for the employer’s receipt of test results.
  • Prohibit only work conduct (e.g., being under the influence at work) and avoid penalizing lawful after-hours activity. (Note, however, that marijuana is still illegal under federal law, so a wrongful discharge claim under a state lawful activities statute may fail if “lawful” refers to federal law too. That was the result in Coats v. Dish Network, a Colorado case.)
  • Notify employees, through handbooks or policies, when drug tests may be required (e.g., workplace accidents, erratic behavior, or other reasonable, clearly defined grounds).
  • Be consistent in enforcing the drug policy and train supervisors to react consistently over time and as between employees. Require that decisionmakers have a legitimate business reason for any adverse action and insist that there be a solid basis for any conclusion that an employee has violated a drug policy (e.g., an admission or a positive test result).

One final recommendation is simply this: Hire an employment law expert to craft your policy and review the policy on an annual basis. Don’t wait until you are sued. There are simply too many changes in this area of law to be certain that a policy will be compliant from year to year. For example, there were changes to OSHA’s regulations on reporting injuries, including post-accident drug testing (which prohibits employers from using drug testing, or the threat of drug testing, as a form of retaliation against employees who report injuries or illnesses) but those were delayed and the future of the rule is uncertain, given the Trump administration’s regulatory rollback. There is also a question as to whether the federal government will start to increase enforcement efforts with respect to the Controlled Substances Act.

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Political battles in store regarding future of OFCCP, action on EEO-1 Report expected next month, NELI expert says

May 25th, 2017  |  Cynthia L. Hackerott  |  Add a Comment

Any proposed merger of the OFCCP into the EEOC will lead to an enormous political fight, that is going to be “battle royale,” attorney and former OFCCP official John C. Fox predicted during an OFCCP update webinar presented by the National Employment Law Institute (NELI) on May 18, 2017. During the webinar, Fox covered several topics regarding the OFCCP’s current status as well as how the likely demise of the compensation reporting requirement in the EEO-1 Report may occur.

Addressing media speculation that the Trump Administration plans to merge the OFCCP with the EEOC, Fox (President of Fox, Wang & Morgan, P.C. in Los Gatos, California) said “it very much appears” that this is the case, but, as of the day of the webinar, the details regarding the final shape of this plan were still being molded. The merger proposal was anticipated to be included in the White House’s budget proposal for fiscal year (FY) 2018, which on the date of the webinar was  expected to be released on Tuesday, May 23. (WK Note:  The White House did in fact release its FY 2018 budget proposal on May 23, and, as anticipated, the DOL budget detail (Appendix p. 749) and the DOL’s budget justification for the OFCCP does propose merging the OFCCP into the EEOC.)

Among the issues with merging the two agencies is the fact that the EEOC doesn’t have statutory authority to enforce Executive Order (EO) 11246, VEVRAA or Section 503 of the Rehab Act. While the non-discrimination requirements of the laws enforced by the OFCCP largely overlap with the those of the laws enforced by the EEOC, whether the affirmative action areas that are unique to OFCCP enforcement will stay within the DOL, be transferred to the EEOC, or be eliminated entirely, is still an issue, Fox explained. Any of these options would require some Congressional action as well as the President amending EO 11246, he pointed out. Currently, the EEOC does not have the authority to do many things that the OFCCP has, including bringing administrative actions to debar federal contractors.

In any event, Fox noted that the discussion of merging the two agencies is not a new thing, indeed, for the past 30 years, the possibility of such as merger has been discussed at the dawn of  every new administration.

Political battles ahead. The decision as to whether the OFCCP will survive lies almost entirely with Secretary of Labor Alexander Acosta, but OMB Director Mick Mulvaney and Attorney General Jeff Sessions will have some input as well, Fox said.

In November 2009, the Obama Administration eliminated the DOL’s Employment Standards Administration (ESA), but maintained the four component agencies previously under the ESA umbrella – the OFCCP, the Wage and Hour Division, the Office of Labor Management Standards and the Office of Workers’ Compensation Programs. Under the previous organizational structure, the Assistant Secretary for the ESA, not the heads of the four sub-agencies, had the authority to report directly to the Secretary of Labor. However, as a result of the 2009 reorganization, the heads of these four now stand-alone agencies report directly to the Secretary of Labor. Accordingly, in Fox’s opinion, anyone nominated to head these agencies must be confirmed by the Senate because they would be “Inferior Officers,” who report directly to Presidential appointees, within the meaning of the “Advise and Consent” clause of the U.S. Constitution.

If there is a confirmation hearing for a nominee to head the OFCCP, it will be politically contentious, Fox predicted, saying it would be a “monstrous battle.” Even if the new OFCCP head can be appointed without the advice and consent of the Senate, it is likely a new director will not be in place until mid-to-late 2017, Fox estimated.

Acosta, who became Labor Secretary on April 28, is moving slowly to install his new team, Fox reported, saying that the Secretary hasn’t started to move any people forward in the nomination process. In any event, Fox anticipates that the administration will decide to leave the position vacant, pending the outcome of any merger proposals as discussed above.

Because “Team Trump” has not yet arrived at the OFCCP to start steering it, the agency is continuing to follow the course it has been since the end of the Obama Administration, Fox stated. Under Interim Acting Director Tom Dowd, audits will continue to be few in number, with the primary focus continuing to be on compensation and failure to hire cases.

Restructuring timeline. On April 12, 2017 OMB Director Mick Mulvaney sent a memo to all federal Executive Branch agencies that lifted President Trump’s previously ordered hiring freeze (January 23 memo), and set forth a plan to reorganize and downsize the federal government. Among other things, Mulvaney instructed the agencies to begin taking immediate action to achieve near-term workforce reductions and cost savings, including planning for funding levels in the President’s FY 2018 Budget Blueprint released on March 16. Director Mulvaney is also looking at the possibility of restructuring by combining common functions from across numerous government departments, Fox said, including the possible merger of the OFCCP into the EEOC.

Pursuant to the April 12 OMB memo, the agencies are required to submit an initial, high-level draft reform plan to the OMB by June 30, 2017, and then submit their detailed restructuring plans by September 2017. Director Mulvaney anticipates publishing his finalized restructuring plan in January of 2018. The plan would then be implemented prior to the start of FY 2019, which means that if a merger of the OFCCP into the EEOC were to occur, it would begin between January 2018 and the fall of that year, Fox explained.

Agency may survive, but continue to dwindle. Even if the OFCCP survives this restructuring process, continued budget reductions will likely require the agency to further downsize its number of personnel and to close offices. With reduced staff and technology advances, onsite audits are only occurring about 5 percent of time at best, Fox observed, adding that the OFCCP doesn’t really need the number of brick and mortar establishments that is currently has throughout the county to function.

Factors weighing in favor of OFCCP survival include the fact that it’s not a “big dollar” agency compared to other DOL agencies, such as the Wage and Hour Division and the Employee Benefits Security Administration, which allows the OFCCP to  “hide in the grass.” Another factor is that most business leaders support the OFCCP’s mission, even while they may criticize its practices in carrying out that mission. The White House will be “stunned” as to how many Republican CEOs will vouch for the OFCCP, according to Fox. “CEOs want the OFCCP to be efficient, focused, and professionally run, not killed,” he said.

Expected withdrawal of compensation reporting addition to EEO-1 form. Meanwhile, whether and how the Trump Administration will withdraw the Obama Administration’s finalized changes to add the collection of summary pay data to the EEO-1 Report is still unsettled. While Fox is convinced that the new administration will do away with this recently-added reporting requirement, how that will occur remains to be seen. While both the OMB and the EEOC have the power to reverse course on the compensation reporting component, Fox notes that its demise will likely come from OMB Director Mulvaney, via his authority under the Paperwork Reduction Act, rather than the EEOC. According to Fox, he has it on good authority that the OMB will issue something regarding this topic next month (June 2017). The main reason the withdrawal isn’t likely to happen via the Commission is that it simply takes time for any President to get all his EEOC Commissioners in place, Fox explained. Given that, if it turns out to be the EEOC, rather than the OMB, who withdraws or revises the added compensation component, this likely won’t happen until the late Fall of 2017.

What should federal contractors do in meantime? Since the first deadline for this revised 2017 EEO-1 Report won’t be until March 31, 2018, contractors can simply sit back and patiently wait for the OMB or the EEOC to take action. Fox recommends that each employer should calculate its last “fail‐safe” day, i.e. the last date it must begin to prepare to report compensation, if the reporting requirement remains. He reports that most of his clients have determined their fail dates as falling in either January or February of 2018. Even if an employer calculates its fail safe date as early as November 2017, there is still time to wait, he notes.

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White House’s FY 2018 budget proposal calls for steep OFCCP funding decrease, merger into EEOC prior to FY 2019

May 24th, 2017  |  Cynthia L. Hackerott  |  Add a Comment

The White House’s FY 2018 budget proposal calls for a $17 million decrease in OFCCP funding and merger of the agency into the EEOC by the end of FY 2018. As for other FY 2018 actions, the budget proposal focuses heavily on compliance assistance, pay discrimination, and construction contractor compliance. In the budget proposal, released on May 23, 2017, the Trump Administration proposes $88 million in funding for the OFCCP, down from the current $105 million funding level. This funding level would include 440 full-time equivalent (FTE) employees, down from the current FY 2017 estimate of 571 FTEs. On top of reducing the overall number of FTEs, the agency would consider reducing the number of its field office locations.

Regarding the proposed merger, the Appendix section for the proposed DOL budget, at page 749, states: “The 2018 Budget proposes merging OFCCP into the Equal Employment Opportunity Commission (EEOC), creating one agency to combat employment discrimination. OFCCP and EEOC will work collaboratively to coordinate this transition to the EEOC by the end of FY 2018. This builds on the existing tradition of operational coordination between the two agencies. The transition of OFCCP and integration of these two agencies will reduce operational redundancies, promote efficiencies, improve services to citizens, and strengthen civil rights enforcement.”

Priorities. According to the DOL’s budget justification for the OFCCP, the budget request will enable the OFCCP to focus on the following priorities:

• Work collaboratively with the EEOC to develop and implement a plan to merge OFCCP into the EEOC by the end of FY 2018.

• Continue its focus on combating pay discrimination through intensive contractor compliance assistance aimed at educating contractors about their contractual obligations, supporting their voluntary compliance with those obligations, and conducting high quality compliance evaluations.

• Continue its focus on larger federal and federally-assisted construction projects that have the potential to employ large numbers of diverse workers.

The OFCCP anticipates that about 35 percent of its discrimination conciliation agreements will address systemic pay discrimination violations, and that at least 50 percent of construction compliance evaluations will be associated with large, high impact construction projects; this number reflects an increase from the 35 percent set in FY 2017.

Skilled Regional Centers. The proposed budget allows for the OFCCP to continue with its plaint to establish two Skilled Regional Centers located in the Pacific (San Francisco) and Northeast (New York) regions. These centers would have highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology. In addition, they would reduce the need for a network of field area and district offices.

Merger plan. The merger plan calls for the OFCCP and the EEOC to establish a transition workgroup to strategically plan and implement the transition process throughout FY 2018. The proposed transfer of operations would touch upon every aspect of OFCCP’s operations including compliance evaluations, compliance assistance, policy, training, stakeholder outreach and education, personnel, contracting and procurement, and information technology.

Under the budget proposal, the OFCCP would focus much of its policy-related actions and activities on supporting the agency merger process in FY 2018. This includes policy and guidance development, stakeholder engagement (e.g., compliance assistance that support contractor voluntary compliance, and communication), and compliance officer training and education. These work priorities, slated to begin in FY 2018 include:

• Drafting and reviewing legislative proposals amending VEVRAA and Section 503 of the Rehab Act;

• Drafting and reviewing a new Executive Order amending EO 11246;

• Undertaking and/or assisting with the rulemaking required to implement the transfer of authority under Section 503, VEVRAA, and EO 11246;

• Finalizing the restructuring of its compliance officer training program;

• Assessing, in coordination with EEOC, a variety of policy and training requirements, such as investigator training programs;

• Developing a plan for integrating OFCCP’s Help Desk functions and EEOC’s system;

• Working with GAO and/or OIG to close-out pending audits and audit recommendations;

• Identifying, merging, and/or eliminating redundant information technology and procurement systems and/or contracts; and

• Creating an effective stakeholder communications strategy that can be used before and during the merger.

Of the OFCCP policy priorities that are not directly related to legally executing the transfer of enforcement authority, finalizing the training program’s framework and completing the Federal Contractor Compliance Manual are the most important, the DOL budget justification states.

The DOL’s press statement on the budget proposal does not mention the OFCCP at all.

Experts predict broad opposition to proposed merger. Both business groups and civil rights groups will strongly oppose the proposed merger, according to experts in the area.

“Not often have we seen such unanimity among civil rights groups, employee advocates, and business groups who are lining up to vocally oppose this proposal,” Mickey Silberman, a Principal in the Denver, Colorado, office of Jackson Lewis P.C. told Employment Law Daily in a May 23rd interview. Considering that the Republicans currently control the House and Senate the policy optics on this proposed merger are “wholly unfavorable,” he said. Prior to the release of the budget, the business community caught wind of the merger proposal and have already had significant discussions among themselves as to the matter, and are “squarely opposed” to it, Silberman reports.

Likewise, in an OFCCP update webinar presented by the National Employment Law Institute (NELI) on May 18, 2017, attorney and former OFCCP official John C. Fox stated that most business leaders support the OFCCP’s mission, even while they may criticize its practices in carrying out that mission. Accordingly, the White House will be “stunned” as to how many Republican CEOs will vouch for the OFCCP. “CEOs want the OFCCP to be efficient, focused, and professionally run, not killed,” he said.

The administration frames this proposed merger as an action that would reduce the federal budget, but the actual budget savings would not be significant, Silberman pointed out. The EEOC’s FY 2018 budget has not been reduced, and a merger of the two agencies would call for an increase to the EEOC’s FY 2019 budget. Even if the post-merger EEOC’s FY 2019 budget were increased by half of the $88 million allocated for the OFCCP in FY 2018, that $44 million dollar in savings “would be less than a drop in the bucket,” he noted.

Fear of “super EEO enforcement agency.” The White House also asserts that the merger will reduce compliance costs and burdens on business, but it will actually have the opposite effect, according to Silberman. Among the employer community, there has been a “quickly growing realization” that the proposed merger could result in a “super EEO enforcement agency” empowered by broader jurisdiction and the ability to impose greater remedies for non-compliance, he said. Because the interests of business would not be well-served, groups such as the U.S. Chamber of Commerce and the Institute for Workplace Equality will oppose this proposal, he added.

Required Congressional actions unlikely. Among the issues with merging the two agencies is the fact that the EEOC doesn’t have statutory authority to enforce EO 11246, VEVRAA or Section 503 of the Rehab Act. While the non-discrimination requirements of the laws enforced by the OFCCP largely overlap with the those of the laws enforced by the EEOC, whether the affirmative action areas that are unique to OFCCP enforcement will stay within the DOL, be transferred to the EEOC, or be eliminated entirely, is still an issue, Fox explained in the webinar. Any of these options would require some Congressional action as well as the President amending EO 11246, he pointed out. Currently, the EEOC does not have the authority to do many things that the OFCCP has, including bringing administrative actions to debar federal contractors.

As mentioned above, the DOL’s budget justification as to the OFCCP does call on the agency to draft and review: (1) legislative proposals to amend VEVRAA and Section 503; and (2) a new Executive Order amending EO 11246. In addition, the agency would need to draft/revise its EO 11246, VEVRAA, and Section 503 regulations to implement the transfer of authority. Notably, the budget proposal is silent on whether these changes to the laws enforced by the OFCCP and their implementing regulations would eliminate the affirmative action component of the OFCCP’s enforcement mission.

In the face of strong business community opposition to the proposal, the Republicans in the House and Senate are not likely to support the proposal, and thus, Congress will not undertake the necessary actions to effectuate the merger, Silberman predicts. It will be an “unpleasant surprise” for this administration to learn that business community is lined up in opposition to this plan, he stated.

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OFCCP continues to post FY 2017 settlements not publicized via agency press releases

May 18th, 2017  |  Cynthia L. Hackerott  |  Add a Comment

The OFCCP’s practice of posting online (via its Class Member Locator webpage and FOIA Reading Room) some conciliation agreements and consent decrees for which the agency did not issue a corresponding press release continues. The following is a listing of such agreements not previously reported in Employment Law Daily . In all of the cases listed below, the contractor did not admit liability.

Compass Group USA, Inc. Compass Group USA, Inc. (Compass), a hotel and hospitality services establishment, will pay a total of $29,921.16 to resolve allegations of hiring discrimination at its Morrison Sector @ Mobile Infirmary, #1055 facility located in Mobile, Alabama. Through a compliance review, the OFCCP determined that from March 1, 2012 through January 31, 2013, the federal contractor discriminated against 189 qualified black applicants who applied for “Service Worker” positions and were not hired. Under a conciliation  agreement, signed between February 15 and March 2, 2017, the contractor will also extend 8 job opportunities to eligible class members as positions become available.

John W. Stone Oil Distributor, LLC. In a conciliation agreement, signed between March 14 and 21, 2017, John W. Stone Oil Distributor, LLC, a company that supplies dockside, midstreaming and offshore fueling, agreed to pay $271,444 in back pay and $28,556 in interest to resolve allegations that it discriminated against 51 qualified minorities who applied for “Deckhand” positions at its Gretna, Louisiana, facility and were not hired. Pursuant to the agreement, JW Stone will also extend 10 job opportunities. The period of alleged discrimination is August 28, 2012 through August 27, 2014.

Land O’ Lakes, Inc. Settling allegations of gender-based pay discrimination at its facility in Shoreview, Minnesota, Land O’Lakes, Inc. has agreed to pay $42,000 to 14 female “Livestock Production Specialists” whom the OFCCP asserts, as of May 29, 2009, were paid less than their male counterparts. The OFCCP determined that there was a pay disparity through a multiple regression analysis. Workers in those positions sell feed and related products and, according to the agency, the pay disparity was caused by discriminatory duty assignments, sales incentive pay programs, and pay increases that negatively affected females. Under a conciliation agreement signed between March 6 and 20, 2017, Land O’ Lakes also agreed to revise relevant policies, and complete a regression analysis of compensation data as of December 31, 2016, for workers in the position at issue. In addition, the contractor will complete a study to evaluate whether promotion decisions, performance evaluations, work assignments, training opportunities, and transfer opportunities are having a disproportionately negative effect on pay equity.

Nebraska Medical Center. Nebraska Medical Center, a complex of hospitals, medical clinics and healthcare colleges, will pay $275,000 to resolve OFCCP allegations that it discriminated against 137 qualified black applicants who applied for “Psych/Clerk Patient Care Tech” and “Clerk/Patient Care Technicians (CNAs)” positions at the contractor’s Omaha, Nebraska facility. The agency alleges that this discrimination occurred from January 1, 2007 through June 30, 2008. Under a conciliation agreement, signed between April 28 and May 9, 2017, the contractor will also extend 23 job opportunities as well as review and evaluate policies affecting hiring selection process.

Oil State Skagit Smatco, LLC. Through a conciliation agreement signed February 8 and 15, 2017, Oil States Skagit Smatco, LLC has agreed to pay $65,000 in back pay and interest that it discriminated against minority applicants for “Mechanic I” positions at its Houma, Louisiana establishment between August 15, 2011 through April 4, 2013. The contractor, which provides offshore equipment and services, also agreed to extend job offers to seven eligible class members and remedy other specified deficiencies with its hiring process, including failing to maintain records, to set a placement goal, and to list job openings with the state workforce agency or local employment service delivery system as required under VEVRAA.

Setex Inc. Manufacturer Setex, Inc., will pay $293,760 to resolve hiring allegations against 63 qualified applicants for “Assembly Technician” positions at its Saint Mary’s, Ohio facility. The conciliation agreement, signed on May 1st and 2nd, 2017, also provides that Setex will extend job offers until 10 eligible class members are placed into the assembly technician positions and that the contractor will revise its selection procedures. The period of alleged discrimination is January 1, 2012 and December 31, 2013.

Sno–White Linen & Uniform Rental. Pursuant to a conciliation agreement signed April 17 and 20, 2017, Sno–White Linen & Uniform Rental, a privately owned industrial laundry and uniform rental company, will pay $90,000 to resolve allegations that it discriminated against 103 whites who were not hired into “Laborer” positions, and 15 whites and 8 females who were not hired into “Route Driver” positions at its Colorado Springs, Colorado facility. Sno–White has also agreed to extend 30 job offers to white class members for Laborer positions, as well as 3 job offers to white class members and 1 job offer to a female class member into the Route Driver position. The OFCCP alleges this discrimination occurred between November 2011 and July 2014.

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Paralift van drivers entitled to overtime pay because capacity of vans measured by present configuration

May 16th, 2017  |  Ron Miller  |  Add a Comment

Paralift van drivers successfully argued that they were entitled to overtime pay because the vehicles they operated were not exempt from FLSA overtime under the Motor Carrier Act exemption, ruled the Eighth Circuit. In LaCurtis v. Express Medical Transporters, Inc., the appeals court concluded that a district court correctly determined that the vans were not “designed or used to transport more than eight passengers” under Section 306(c) of the SAFETEA-LU Technical Corrections Act (TCA). As originally manufactured, the vans could accommodate either 12 or 15 passengers. However, they underwent significant modifications to be employed as wheelchair accessible vehicles. The vans weighed less than 10,000 pounds, and were presently configured to accommodate less than eight passengers (including the driver).

In this case, several paralift van drivers initiated separate actions seeking to recover overtime pay. Those cases were consolidated into this action. Although the drivers routinely worked more than 40 hours a week, their employer did not pay them overtime. It argued that the drivers were not eligible for overtime because the overtime provisions did not apply to any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service—commonly referred to as the Motor Carrier Act (MCA) exemption.

Design and use. The pivotal issue was whether the paralift vans in this case were “designed or used to transport more than 8 passengers” for purposes of Section 306 of the TCA. The vans were originally designed and manufactured to carry up to 12 and 15 passengers. They have a gross vehicle weight of 10,000 pounds or less. Before placing the vans in service, they were converted into paralift vans. The vans as configured have a maximum seating capacity of five and six passengers (two passengers in wheelchairs, and up to five additional passengers).

Motor carrier exemption. In 2008, Congress passed the SAFETEA-LU Technical Corrections Act (TCA), which narrowed the scope of the MCA exemption. Under the TCA, the FLSA overtime provisions “apply to a covered employee notwithstanding the MCA exemption.” The term “covered employee” means a driver or helper “whose work, in whole or in part,” affects “the safety of operation of motor vehicles weighing 10,000 pounds or less,” unless the vehicle is “designed or used to transport more than 8 passengers (including the driver) for compensation.”

Deference. The district court gave deference to U.S. Department of Labor Field Assistance Bulletin No. 2010-2 (FAB 2010-2) in which the agency announced that it would determine whether a vehicle is “designed or used to transport more than 8 passengers” “based on the vehicle’s current design and the vehicle capacity as found on the door jam plate.” Accordingly, the lower court concluded that wheelchair placement should count as one passenger, and decided that the employees were “covered employees” under TCA Section 306 because the paralift vans they drove had fewer than eight seats. It granted the employee’s motion for partial summary judgment on the issue of liability.

On appeal, the Eighth Circuit had to determine whether the district court erred in failing to give controlling deference to 49 C.F.R. Section 571.3(b)(1) in interpreting TCA, Section 306. It concluded that it did not. There was nothing in the record to indicate that either the Secretary of Transportation or the FMCSA had examined the TCA or weighed in on its meaning or its possible effect on the MCA exemption, much less said that the limited definition in Section 571.3(b)(1) should control the appeals court interpretation of the TCA. Accordingly, the district court did not err in declining to give controlling deference to Section 571.3(b)(1) in deciding the drivers were “covered employees” under TCA, Section 306.

Meaning of “designed.” Next, the appeals court had to determine if the paralift vans were “designed or used to transport more than 8 passengers.” Here, the appeals court gave “some deference” to the WHD interpretation in FAB 2010-2. The term “designed” is not defined in the TCA, and the statute lacks a “temporal qualifier” that would make the meaning clear as it relates to the dispute in this case. It found that the interpretations proposed by both parties were reasonable. However, it concluded that Congress did not intend for the term “designed” as used in TCA, Section 306(c) to be limited to a vehicle’s original design no matter what happened to the vehicle after its original design. Because the paralift vans could no longer accommodate more than seven passengers following modification, the district court’s judgment that the employer was liable for overtime pay was affirmed.

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