Refusing to overturn a jury verdict in favor of a security company employee who reported a lack of compliance with safety policies at the paper mill site where he worked to the state’s governor — because it was a visit from the governor that failed to comply with those policies — the Maine Supreme Judicial Court held the employee’s report, for which he was fired, was protected under the state Whistleblowers’ Protection Act. The court reiterated that the WPA does not limit a whistleblower claim to those reports that are exclusively related to an affirmative act of the employer. Instead, the report must address violations, conditions, or practices that the employer has the ability and authority to correct, said the court, and what the report complains of must bear a direct relationship to the employee’s current employer (Hickson v Vescom Corp, February 25, 2014, Saufley, L).

Improper footwear. The employee was a shift supervisor who worked the gate for a security company that provided private security services at a paper mill. He had both security and safety duties, including following and enforcing the paper mill’s safety policies, among them a requirement that visitors carry respirators and wear protective footwear. When the state governor visited the mill with a state representative and others, the employee was working the gate, but the governor’s party did not check in, nor were any of the visitors carrying respirators or wearing appropriate footwear. He noted that in his log and later discussed it with both his security company supervisor and the mill’s safety manager, who had escorted the governor’s party through the mill. Neither of them appeared concerned.

Report to governor. So about two weeks later, the employee sent an email to the governor from his personal email account, pointing out that compliance with the safety standards would assist security officers in the event of an emergency. Although he noted that he was sending the email from his personal account, he included his employer’s name in his signature. He was fired the next day after the governor’s staff contacted his employer.

Who was responsible for the conduct reported? The employee’s whistleblower suit survived summary judgment, and a jury returned a unanimous verdict in favor of the employee, including compensatory and punitive damages. The security company moved for judgment as a matter of law (as it had during trial), asserting again that the employee’s email was not a legally protected whistleblower report because it did not address a practice by the security company. On appeal, it continued to argue that it was entitled to a judgment as a matter of law because the conduct that the employee reported was not undertaken by it as his employer, and therefore the WPA did not apply.

What does WPA require? Treating it as matter of statutory interpretation, the court first cited the applicable statute, 26 M.R.S. Sec. 833(1) and (2). It looked to its own precedent that to prevail on a WPA claim, an employee must show that “(1) he engaged in activity protected by the WPA; (2) he experienced an adverse employment action; and (3) a causal connection existed between the protected activity and the adverse employment action.” Because Sec. 833(2) requires that the conduct reported must have been something that the employer would have “a reasonable opportunity to correct” if it had been told of the conduct before the whistleblower report was made, it was clear to the court that the offending conduct must be connected to the actions of the employer. Thus, only employees who report to an employer about a violation “committed or practiced” by that employer are protected.

Direct relationship to employer. Here, however, the court went on to clarify that neither its previous opinions nor the WPA itself limited a whistleblower claim to reports that were exclusively related to an affirmative act by the employer. A report must address violations, conditions, or practices that the employer has the ability and authority to correct, and the complained-of acts “must bear a direct relationship to the employee’s current employer.”

That was the case here, said the court, noting the employee’s report occurred while he was employed by the security company and was directly related to his job. He reported a safety concern that his security company employer, which had adopted the mill’s safety standards verbatim, was required to follow and enforce. He reported it to his supervisor at the security company and to the safety manager at the mill. He was fired, according to the evidence, at least in part because he failed to go further up the chain of command before contacting the governor’s office. Thus his report concerning the security company fell directly under the Act.

That was adequate to support the jury’s verdict that the email constituted a legally protected whistleblower report, that the security company was in charge of security and safety at the mill, that the security company’s involvement in the security lapse when the governor visited was a subject of the email, and that the employee notified his security company supervisor, giving it “a reasonable opportunity to correct” the situation. Accordingly, there was no error in denying the employer’s motion for judgment as a matter of law. The court similarly rejected the employer’s challenge to the denial of its own requested jury instructions, finding they were based on an overly restrictive reading of the court’s own precedent and that the lower court’s instructions sufficiently covered the statutory language.

The Olive Garden restaurant chain failed to establish that it formed a valid arbitration agreement with a waitress who sued the company, a Missouri appeals court held, affirming a trial court’s refusal to compel arbitration of her discrimination and retaliation claims. Although the employee signed an acknowledgement that she received the company’s dispute resolution policy, the acknowledgement was not signed by management even though it contained a line for “management signature.” In the absence of a signature, whether the employer had nonetheless accepted the terms of a contract was a question of fact (Baier v Darden Restaurants, February 25, 2014, Martin, C).

Acknowledgements of receipt. During her year and a half working for Olive Garden (Darden Restaurants), the employee signed three separate acknowledgements of receipt of a booklet describing the employer’s dispute resolution process — one in January 2011 when she was hired, one in March 2011 when she was transferred to another restaurant, and one in July 2012 when she was transferred again. Although the first two acknowledgements included a line for a “management signature,” neither agreement was signed by Darden managers. The third acknowledgement included a notation of revision, but did not include a line for “management signature.” It also was not signed by a Darden manager.

When the employee left Darden, she filed sex discrimination and retaliation charges with the state commission on human rights and eventually filed suit alleging sexual harassment and gender discrimination, as well as retaliation, in violation of the state human rights act. The employer filed a motion to dismiss or, in the alternative, to stay proceedings and compel arbitration. In doing so, Darden relied upon the dispute resolution process and the employee’s signature on the January 2011 acknowledgement. The employee contended that no valid agreement had been formed by the first acknowledgement because Darden had not signed it. The trial court denied the motion and the employer appealed. The appeals court concluded a valid arbitration agreement did not exist.

Absence of offeror’s signature. The elements required to form a valid contract under Missouri law are offer, acceptance, and bargained-for consideration. In this instance, the employer bore the burden of proving the existence of a valid arbitration agreement. Offer and acceptance requires mutual agreement and, although the employee signed the first acknowledgement, which loosely constituted a proposal to enter into a bilateral contract, that bilateral contract had not been accepted by the other party to the contract, i.e., Darden, because it failed to sign the acknowledgement.

While a signature is not the only way to establish acceptance, in absence thereof the employer must present other evidence establishing its assent to abide by the agreement’s terms. Acceptance in the absence of a signature is a question of fact. (Contrary to the employer’s argument, the court emphatically noted that it was not a “self-evident” conclusion that a bilateral contract had been formed when an offeree signed “an unsigned proposal.”) However, evidence of the employer’s intent was limited to its assertion that it meant for the acknowledgement to be an offer that would be mutually binding if accepted by the employee in writing. But the trial court was free to disregard this “self-serving claim.” In fact, the appeals court noted, contrary evidence of Darden’s intent could be found in the fact that the first acknowledgement contained a line for “management signature,” which remained unsigned. And Darden offered no explanation for the absence of a signature. Thus, it would have been reasonable for the trial court to believe that inclusion of that signature line reflected “Darden’s intent that its signature be affixed as a condition of mutual assent.” Indeed, the appeals court said it was “hard pressed” to determine any other purpose for placing such a signature line in the document other than to require a signature as a condition of mutual assent.

The appeals court presumed that the lower court had weighed the evidence and witness credibility and found that the parties had not mutually assented to the terms of the bilateral agreement. That factual finding was supported by the record, and as such, the trial court’s denial of the motion to compel arbitration was not error.

Mutuality of remedy doctrine inapplicable. As a final note, the appeals court rejected as unpersuasive Darden’s argument based on a 1954 case; its holding was narrow and only pertained to mutuality of remedy when a non-signing party later sued to enforce a contract. Mutuality of remedy was an obsolete doctrine in equity and implicated the means by which a contract could be enforced, not whether a contract had actually been formed. There was “simply no authority” to support the proposition that mutual assent to the terms of a bilateral contract could be supplied by a later suit to enforce the contract, long after the contract was purportedly formed.

After finding that employees at three hospitals failed to present sufficient evidence of a corporate policy to require work without pay, a federal district court in Massachusetts granted a healthcare system’s motion to decertify an FLSA collective action. The employees had alleged that they were not compensated for time worked during meal breaks, and before and after shifts. However, the court concluded that in the absence of proof of a corporate policy, a class-wide resolution of the suit was not appropriate (Norceide v Cambridge Health Alliance, February 24, 2014, Gorton, N).

Interrupted lunch breaks. The named plaintiffs, a unit secretary, registered nurse, pharmacy employee, and an admission nurse, alleged that they either frequently missed lunch breaks or had their lunches interrupted for work-related matters. They worked as nonexempt, hourly employees of the three hospitals in the employer’s healthcare system. All named plaintiffs alleged that they were compensated only for scheduled time and so were not compensated for missed or interrupted lunch breaks or for work performed before or after their scheduled shifts.

Previously, the court conditionally certified a class of 205 individuals who claimed to have been uncompensated for missed or interrupted lunch breaks or for work performed outside of scheduled shifts, and consisted of a wide range of job categories. Class members worked at three different hospitals for many different supervisors. They were also subject to different collective bargaining agreements negotiated by their respective unions.

Testimony by the employer’s Senior VP for Human Resources indicated that the employer’s policy was to pay for time worked and suggested that two documented instances in which supervisors declined to pay overtime when the work was not pre-approved were anomalies involving overzealous supervisors rather a reflection of actual policies. There was also evidence in the record that plaintiffs and class members who sought payment for uncompensated time were ultimately compensated.

Motion to decertify. The court conditionally certified a class comprised of non-exempt employees who were 1) subject to an automatic meal break deduction and yet were not paid for time worked during a meal break or for a missed meal break or 2) paid only for scheduled time even when they began work before the start of the scheduled shift or worked past the end of their scheduled shift. The record suggested that the reasons for missed meal breaks and working before and after scheduled shifts varied widely as did the propensity of opt-in members to request overtime pay for extra work.

The plaintiffs asserted that those differences were irrelevant to the question of whether the conditionally-certified class should be decertified. Rather, they suggested that the issue of whether the employer had constructive knowledge that plaintiffs and opt-in class members were working off the clock can be proven on a class-wide basis. However, the court disagreed. It observed that while the plaintiffs were correct that the employer generally required overtime work to be approved by a manager before being submitted to payroll, it was lawful for the employer to do so. It was also lawful for the employer to automatically deduct time for meal breaks and to shift the burden to employees to report when their meal breaks were missed or interrupted.

Official policy to pay for time worked. Moreover, the record indicated that the employer’s official policy was to pay employees for the time they worked. There were processes through which employees could be compensated absent manager approval such as contacting payroll directly or working through their unions and employees who followed those procedures were compensated. The fact that some employees chose not to follow those procedures was not sufficient to establish that the employer had constructive knowledge of uncompensated work or a general, common policy of failing to compensate for all work performed.

As a result, the court determined that the plaintiffs did not present sufficient evidence of a corporate policy to require work without pay that would render class-wide resolution appropriate. Given the plaintiffs’ disparate work settings, reasons for missing lunch breaks and working early or late, and the diverse reasons for their not seeking compensation or being rebuffed when they did, liability could not be determined on a class-wide basis. It would necessarily require individualized inquiries into the actions of different supervisors. Consequently, the court granted the employer’s motion to decertify the conditionally certified class.

The University of Notre Dame could not show it would suffer irreparable harm were it not granted injunctive relief pending its ongoing challenge to the Affordable Care Act’s contraceptive mandate provisions — or more precisely, the ACA regulation that requires the Catholic university to submit a form in order to avail itself of the religious exemption from the mandate. Therefore, a divided Seventh Circuit panel affirmed a lower court’s refusal to grant a preliminary injunction in the case. At least for now, the appeals court held, Notre Dame failed to show the regulations worked a substantial burden on its religious faith (University of Notre Dame v Sebelius, February 21, 2014, Posner, R).

The federal government has provided an exemption to churches and religious institutions from the ACA’s requirement that contraceptive services be covered. As the Seventh Circuit majority observed, Notre Dame’s claim was novel: it wasn’t suing to secure an exemption, to which it already was entitled; rather, it sought “the right to have it without having to ask for it.” Thus far, there have been 19 cases challenging the application of the contraceptive mandate to religious nonprofits, and every plaintiff besides Notre Dame has received an injunction (though mostly in a district court).

“What makes this case and others like it involving the contraception exemption paradoxical and virtually unprecedented is that the beneficiaries of the religious exemption are claiming that the exemption process itself imposes a substantial burden on their religious faiths,” Judge Posner wrote for the majority. Yet “[t]he process of claiming one’s exemption from the duty to provide contraceptive coverage is the opposite of cumbersome. It amounts to signing one’s name and mailing the signed form to two addresses.”

Opt-out requirement. Notre Dame provides health benefits to its employees (and students). It self-insures employees’ medical expenses but utilizes the services of a third-party administrator (TPA) to administer coverage for some 4,600 employees and 6,400 dependents. Because Catholic doctrine forbids the use of contraceptives, Notre Dame has never paid for contraceptives for its employees, and it previously challenged the ACA’s mandate that it do so. However, a few months after the ACA was enacted, the government crafted the religious exemption. Narrowly drafted at first, Catholic institutions like Notre Dame, which are incorporated as nonprofits rather than religious institutions, were initially excluded. But new regulations issued in July 2013 enlarged the exemption, and Notre Dame now came within its scope.

To exercise its right to opt out of contraceptive coverage, though, the university must complete an “EBSA Form 700” certification. The short form essentially requires the institution to certify that, “on account of religious objections, the organization opposes providing coverage for some or all of any contraceptive services that would otherwise be required to be covered; the organization is organized and operates as a nonprofit entity; and the organization holds itself out as a religious organization.”

The institution must then provide a copy of the certification to its TPA in order to be accommodated with respect to the contraceptive coverage requirement. That step alerts TPAs (or health insurers) that they will have to pay for contraceptive coverage, given the religious entity’s objection. Notre Dame has signed the form and sent copies to its TPA, complying under duress. But it claims that by requiring the university to fill out the form and give copies to the TPAs, the federal government has substantially burdened its exercise of religion.

“But the university has not yet shown that there is a substantial burden. The form is two pages long — 737 words, most of it boring boilerplate,” the court said, noting too that the only passages of consequence here consist of a mere 95 words. “Signing the form and mailing it … could have taken no more than five minutes. The university claims that there are other paperwork requirements; there aren’t.”

“Trigger” argument fails. “The only colorable burden it complains about has nothing to do with time or cost; it is that by filling out the form and sending it to the companies, it ‘triggers’ their coverage of the contraception costs of the university’s female employees and students, and that this makes the university an accomplice in the provision of contraception, in violation of Catholic doctrine.” Essentially, Notre Dame saw the regulation and its opt-out requirement as making the mailing of the certification form to the TPA the cause of the provision of contraceptive services to its employees, in violation of its religious beliefs. “Not so,” the majority ruled.

It is federal law — not the religious organization’s signing and mailing the form — that requires insurers (or, in this case, a TPA) to cover contraceptive services, the appeals court explained. By refusing to fill out the form, Notre Dame would be subjected to  penalties, but the TPA would still be required by law to provide the contraceptive services to the university’s employees, at least until their contract with Notre Dame terminated. “The sole ‘enabler’ is the federal statute that Notre Dame has been allowed to opt out of.”

What injunctive relief? Puzzling to the court, moreover, was precisely what form of injunctive relief Notre Dame was hoping to procure, since “the university hasn’t told us what exactly it wants enjoined at this stage in the litigation.” The majority theorized that the university wanted an order barring the TPA from providing contraceptive coverage to its staff pending a final judgment on the merits. But the TPA was not named as a defendant, so it “can’t be ordered … to do anything,” the court noted. “Furthermore, while a religious institution has a broad immunity from being required to engage in acts that violate the tenets of its faith, it has no right to prevent other institutions, whether the government or a health insurance company, from engaging in acts that merely offend the institution.”

“As we cannot figure out what Notre Dame wants in the way of preliminary relief, we cannot make a determination that it will suffer irreparable harm if we affirm the denial of such relief.”

Dissent. Judge Flaum dissented, arguing that Notre Dame made out a credible claim under the Religious Freedom Restoration Act that the ACA and its regulations are a substantial burden on the university’s exercise of religion. Flaum would have granted Notre Dame a preliminary injunction forbidding the government from penalizing the  university for refusing to comply with the certification requirement.

“I do not question that the accommodation is the government’s good-faith attempt to meet religious objectors halfway,” Flaum wrote. “Nevertheless, by putting substantial pressure on Notre Dame to act in ways that (as the university sees it) involve the university in the provision of contraceptives, I believe that the accommodation still runs afoul of RFRA.”

Affirming judgment for an employer on an employee’s FMLA and state law claims, the Ninth Circuit ruled that, contrary to her assertions, it was legally possible to refuse FMLA protections by choosing not to designate FMLA-qualifying leave as such. Further, the evidence supported the conclusion that the employee had taken FMLA leave in the past but had reasons for choosing to use vacation time instead because that would preserve all 12 weeks of FMLA leave for future use. The appeals court also affirmed the district court’s order denying the employer’s motion for costs (Escriba v Foster Poultry Farms, Inc, February 25, 2014, Gilman, R).

The employee worked in the poultry processing plant for 18 years. On November 18, 2007, she met with her supervisor to request “vacation” time to care for her sick father in Guatemala. The supervisor gave her a piece of paper confirming two weeks of “vacation.” The employee alleged that she sought a week or two of additional unpaid leave but the supervisor said no. The supervisor, who does not speak Spanish, had a follow-up meeting with the employee, including another supervisor who could interpret. He asked the employee if she needed more time in Guatemala to care for her father and she said “no.” Hearing this, the supervisor asked the interpreter to repeat the question and the employee again answered “no.” She also testified later that she intended to request vacation time, not “family leave.” The supervisor filled out the vacation paperwork and told her in English to visit HR if she decided to ask for more leave.

According to the employee, she then went to the facility superintendent, who speaks Spanish, and asked if he could give her one or two weeks more leave. He said no but told her to bring a doctor’s note when she returned to work. According to his testimony, however, the employee asked “strictly” for “vacation time” and not “family leave.” He also testified that when she asked what to do if she could not return by December 10, he told her to “fax or send a note” to HR.

Termination. Soon after arriving in Guatemala, the employee decided to stay longer than planned. On direct examination she said she tried to contact the employer to extend her leave but on cross-examination she contradicted herself when asked why she didn’t call her employer to report the delay; she answered “I just couldn’t think about it. I didn’t remember.” She also conceded that she spoke to her husband, who also worked for the employer, but never told him to contact HR on her behalf. She was ultimately terminated for failing to comply with the employer’s “three day no-show, no-call rule.”

The employee filed suit alleging violations of the FMLA, the California Family Rights Act (CFRA), and public policy. (Because identical standards applied to the FMLA and the CFRA and violations of either would violate California public policy, the Ninth Circuit referred to all three causes of action as arising under the FMLA.) The jury returned a verdict in favor of the employer and the employee renewed a motion for judgment as a matter of law. Denying the motion, the court concluded that substantial evidence supported the jury’s finding that she had “knowledge of FMLA leave and how to invoke it,” yet unequivocally declined to take more time or to request FMLA leave. The court also denied the employer’s motion for costs.

Refusing FMLA rights is not “legally impossible.” On appeal, the employee contended that it was undisputed she told her supervisor and the superintendent she needed time off to care for her ailing father, which she argued automatically entitled her to FMLA protections. In her view, the employer was required to provide her with notice of her FMLA rights regardless of whether she expressly declined to designate her leave as such. She argued that refusing to exercise FMLA rights as soon as they are available is “legally impossible.”

As an initial matter, the appeals court noted that the FMLA does not expressly state whether an employee may defer the exercise of FMLA rights. However, applicable DOL regulations provide guidance, stating that after an employee alerts the employer of the desire for FMLA-qualifying leave, the “employer will be expected to obtain any additional required information through informal means.” Further, during this “informal” process, the employee is expected to “provide more information.” Though the “employee need not expressly assert rights under the FMLA or even mention the FMLA,” the employer “should inquire further of the employee if it is necessary to have more information about whether FMLA leave is being sought by the employee, and to obtain the necessary details of the leave” (emphasis added by the court).

To the appeals court, the “employer’s obligation to ascertain ‘whether FMLA leave is being sought’ strongly suggests that there are circumstances in which an employee might seek time off but intend not to exercise his or her rights under the FMLA.” And practically speaking, holding that simply referencing an FMLA-qualifying reason triggers the Act’s protections would put employers in an untenable situation if the employee’s stated desire was not to take FMLA leave, because the employer could be liable for forcing FMLA leave on the unwilling employee. Accordingly, the court concluded that an employee can affirmatively decline to use FMLA leave, even if the underlying reason for seeking leave would qualify for FMLA protection.

The court further noted that declining FMLA leave is not the same thing as a “waiver” which involves trading the right to take FMLA leave for some other benefit offered by the employer and is prohibited. It also pointed out that a waiver is the “voluntary relinquishment of a known right” but “affirmatively declining the present exercise of a right in order to preserve it for the future is fundamentally different from permanently relinquishing that right.”

Evidence supported verdict. The employee fared no better on her argument that the verdict was not supported by substantial evidence. The Ninth Circuit pointed out that after the first meeting, the supervisor had an interpreter ask the employee twice if she needed more time in Guatemala but she said “no.” Then the supervisor told her to visit HR if she wanted more leave. A jury hearing this could conclude the supervisor inquired further about whether the employee sought FMLA leave and the employee clearly indicated she did not intend to take FMLA leave. Indeed, the fact that she approached the supervisor instead of HR was telling because, as she conceded, the supervisor had approved her past vacation requests while HR had handled all of her requests for FMLA leave. In addition, witnesses corroborated the supervisor’s testimony.

Furthermore, the evidence suggested the employee knew that HR approved FMLA leave, and not her supervisor, because she had successfully requested FMLA leave on fifteen prior occasions. A reasonable inference would be that if she wanted FMLA leave, she would have arranged for it with HR. The court also noted that the employer introduced evidence explaining why the employee might have declined FMLA leave at that time. Under its policies, FMLA leave runs concurrently against the balance of accrued vacation until vacation time is exhausted; then the employee may remain on unpaid leave until a total of 12 weeks elapses. But if an employee declines FMLA leave, the employee can first take paid vacation and then still have the full 12 weeks of FMLA leave remaining. The jury could have concluded from this that the employee here sought to preserve her future FMLA time.

Prior FMLA usage. According to the employee, the district court also erred in admitting irrelevant and highly prejudicial evidence about her prior FMLA leave, which she claimed had “no bearing on whether she gave statutory notice.” The lower court permitted the evidence on the limited issues of whether there was a policy and procedure in place for FMLA leave, whether it was applied consistently, whether the employee followed it on prior leaves, and whether she knew the policy and procedure applied to the circumstances here. Finding no error, the Ninth Circuit pointed out that the employee’s argument rested on the erroneous assertion that simply mentioning an FMLA-qualifying reason for an absence triggers the Act’s protections and that it is “legally impossible” to refuse FMLA rights. But nothing in the FMLA precludes an employee from deferring the exercise of FMLA rights. Thus, the district court did not err in admitting the evidence of her prior FMLA usage and the judgment in favor of the employer was affirmed.

Order denying costs. In its cross-appeal, the employer contended that the district court erred in denying it costs. The court had based its decision on the employee’s limited financial means, the financial disparity between the parties, the chilling effect that taxing costs might have on future FMLA cases, and the fact that the case involved close issues of substantial public importance. The appellate court found no abuse of discretion in any of these reasons or in the ruling. In particular, it noted the importance of the case was evident by a Department of Labor letter  explaining that cases like the employee’s “establish parameters of what constitutes sufficient employee notice,” which is “particularly important to the public interest.” It also noted that the employee has had trouble securing employment while the employer is a multistate operation that made approximately two billion dollars in 2007 and 2009.

West Virginia’s Supreme Court of Appeals breathed new life into the wrongful discharge claim of a city police chief who alleged that he was fired after he refused to place a GPS device in the cruiser of a police officer who had filed a race discrimination suit against the city. The Supreme Court held that the circuit court’s dismissal of the wrongful discharge claim was in error; it was a violation of state public policy for an employer to discriminate against an employee for refusing to retaliate against another employee who had filed a racial discrimination claim against the employer. Moreover, the city and mayor were not entitled to qualified immunity (Brown v City of Montgomery, February 20, 2014, Benjamin, B).

After a police officer filed a race discrimination suit against the city, the police chief allegedly was directed to retaliate against the officer. Specifically, he was asked by the defendants to place a GPS device in the officer’s cruiser to track his whereabouts. However, the police chief refused to do so and, months later, he was discharged. He filed suit alleging that he was discharged in contravention of public policy. The lower court found the defendants were entitled to qualified immunity because the alleged conduct — instructing the chief to place a GPS in a city-owned police car — did not violate clearly established laws of which a reasonable official would have known, nor was the conduct fraudulent, malicious, or otherwise oppressive.

The West Virginia Supreme Court’s holding on appeal was clear: “[I]t is a violation of the substantial public policy of this State for an employer to discriminate against an employee for refusing to retaliate against another employee who has filed a racial discrimination claim against the employer.”

Public policy violation. Refusal to retaliate against the officer constituted a substantial public policy of the state under Harless v. First National Bank. That case held that the rule allowing an employer to terminate an employee at will was “tempered by the principle” that where the employer’s motivation contravened a substantial public policy principle, the employer could be liable to the employee for damages. Providing equal employment opportunity regardless of race constituted a substantial public policy of West Virginia, and the Human Rights Act reflected the state’s public policy in the field of human relations. Of particular significance to the high court was a state-code provision which provided, among other things, that it would be an unlawful discriminatory practice to compel or coerce any person to engage in any unlawful discriminatory practices defined in the section or to discriminate against any person because that person had opposed any practices or acts forbidden under the article. In fact, the court had previously held that the section prohibited an employer from retaliating against any individual for expressing opposition to a practice that he or she reasonably believed violated the provisions of the state’s human rights act.

Moreover, the police chief’s complaint stated a cause of action for wrongful discharge for refusing to retaliate against another employee who had filed a race discrimination claim. He alleged that the officer instituted a race discrimination suit and that the mayor directed him to place a GPS in that officer’s car to track his whereabouts in retaliation for that suit. He alleged that he refused to do so and that the mayor discharged him. His complaint also alleged that the termination was in contravention of state precedent because the motive behind his termination was retaliation. Therefore, his complaint gave the defendants fair notice of the claim and the grounds that it rested upon. If the police chief could prove the facts he alleged, he would be entitled to relief.

Qualified immunity. Moreover, contrary to the ruling of the circuit court, the city and the mayor were not entitled to qualified immunity. First, the city was not covered by the state’s Tort Claims Act under the facts of this case. The police chief’s civil action alleged wrongful discharge and, therefore, arose out of the employment relationship between the chief and a political subdivision. As such, it was specifically excluded under the Act. The claim against the mayor also was excluded under the Act because liability was imposed on him by a state-law provision making it an unlawful discriminatory practice for any “person” to discriminate against an employee for opposing conduct forbidden under the Human Rights Act. And the court had previously defined “person” to include both employees and employers. Thus, the mayor was not immune.

Moreover, the conduct alleged by the police chief violated clearly established laws. The circuit court had erred in focusing on whether the GPS placement violated a clearly established law; the primary allegation was that the mayor had a wrongful motive in requesting the GPS placement, not that the GPS placement itself was unlawful, the high court said. The police chief alleged that he was fired for refusing to retaliate against the officer, and the state’s human rights act prohibits such conduct. Moreover, the relevant provision was clearly established because it had been part of the Human Rights Act since 1973.

Also, the court had previously recognized that employers are bound to know the fundamental public policies of the state as expressed in its statutes. Thus, a reasonable official would know the provisions of that Act. Finally, there was no qualified immunity for executive officials whose acts were malicious, fraudulent, or otherwise oppressive, the court observed, and the police chief had alleged facts sufficient to support his allegation that the mayor’s conduct was malicious.

A unanimous Illinois Supreme Court rejected a construction contractor’s facial constitutional challenges to the Illinois Employee Classification Act (ECA). The court first found that the contractor’s due process challenge to the pre-amended Act’s enforcement provisions was rendered moot by amendments to the ECA. However, the court did not address the contractor’s procedural due process claim on its merits because it could not evaluate the correctness of the appellate court’s judgment on that issue. With respect to the appellate court’s finding that the ECA’s exemption provision was not unconstitutionally vague, the state high court affirmed that judgment, rejecting the contractor’s assertion that it was impossible to know how to comply with the exemptions (Bartlow v Costigan, February 21, 2014, Kilbride, T).

A construction contractor brought suit challenging the constitutionality of Illinois’ Employee Classification Act (ECA), 820 ILCS 185/1. The Act sought to address the practice of misclassifying employees as independent contractors in the construction industry. It creates a broad presumption that any individual “performing services,” as statutorily defined, for a construction contractor is an employee of that contractor. However, the Act exempts independent contractors, sole proprietors, or partnerships that can satisfy statutory criteria showing that they effectively operate independently of the construction contractor.

Construction industry targeted. In September 2008, the Illinois Department of Labor began an investigation of the plaintiff contractor after receiving a complaint that it was violating the Act by misclassifying its employees as independent contractors. In February 2010, the IDOL made a “preliminary determination” that the contractor had misclassified ten individuals as independent contractors. The following month, the IDOL sent the contractor notice of a second investigation. In response, the contractor filed this action seeking declaratory judgment and injunctive relief against the Director of the IDOL, who was charged with enforcing the provisions of the ECA.

According to the plaintiff, the IDOL’s actions caused uncertainty on “how to continue in their business in compliance with [the Act].” The contractor alleged that the ECA was unconstitutional because it violates: (1) the special legislation clause of the Illinois Constitution in that it subjects the construction industry to more stringent employment standards than other industries; (2) the due process clauses of the U.S. and Illinois Constitutions because it does not provide an opportunity to be heard and is impermissibly vague; (3) the prohibition against bills of attainder in the U.S. Constitution because it is a legislative act that inflicts punishment without a judicial trial; and (4) the equal protection clauses of the U.S. and Illinois Constitutions because no other industry is subjected to the same standards when seeking to hire independent contractors. The lower courts rejected the contractor’s facial challenges to the constitutionality of the ECA.

Amendments to ECA. During the pendency of this appeal, the ECA was substantively amended to require the IDOL to provide notice of alleged violations within 120 days of a complaint and to conduct a formal administrative hearing regarding violations. The amendments also reduced civil penalties to $1,000 per day for an employee misclassification. As a result, the Illinois high court directed the parties to brief the issue of whether the amended statute should be applied to this case and, if so, whether the constitutional challenges have been rendered moot.

The contractor argued against retroactive application of the amended ECA, but the court agreed with the IDOL that the amended Act must be applied to this case. The court observed that when the contractor brought this action there was no final determination regarding its violation of the Act and no penalties assessed. Thus, the IDOL’s ability to enforce the Act against the contractor depends on its future compliance with the new enforcement requirements.

Due process claim moot. The Illinois high court first addressed the contractor’s procedural due process claim — specifically, the contractor’s contention that the Act improperly authorizes the IDOL to perform “a judicial function” without providing a proper hearing and other procedural safeguards. However, it noted, the Act’s enforcement procedures underlying the due process challenge were substantively replaced during pendency of this appeal; thus, the procedural due process claim was moot. Declaring the pre-amendment Act’s enforcement system unconstitutional and entering an injunction against its use would have no practical effect because the IDOL lost the ability to use that system when the amended statute took effect.

Vagueness challenge. The contractor next argued that Sec. 10 of the ECA, providing statutory exemptions from the Act, was unconstitutionally vague. Because the amendments did not alter the language of Sec. 10, the vagueness challenge was not rendered moot. The contractor contended that because an ordinary person could not determine whether a contractor has complied with the Act, or whether an individual qualifies for exemption under that provision, “impossibility of compliance means that the Act provides no standard of conduct at all.”

The Illinois high court has recognized that “[a] statute can be impermissibly vague for either of two independent reasons: (1) if it fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits, or (2) if it authorizes or even encourages arbitrary and discriminatory enforcement.” A review of the plain meaning of Sec. 10 demonstrated that its provisions provide a person of ordinary intelligence a reasonable opportunity to understand what conduct the Act prohibits, the high court found. Likewise, the provisions were sufficiently detailed and specific to preclude arbitrary enforcement.

Equal protection guarantees. The contractor also asserted that the ECA violated the Illinois Constitution’s prohibition against special legislation and the federal and state constitutional guarantees of equal protection. Observing that these challenges were raised in a cursory fashion, the court declined to consider them, finding the contractor forfeited the claims by failing to brief them fully before the court.

Acknowledging that in the social context of the Rhode Island Department of Transportation a certain level of salty language and interpersonal rivalry is expected, a federal district court in Rhode Island found that a heterosexual male’s allegation that his male trainer subjected him to comments that were sexual in nature, boorish, and inappropriate for the workplace was not sufficient to support his hostile work environment claim. Although the employee succeeded in “showing the lack of decorum” at the RIDOT during his brief tenure, he “abjectly failed, however, to show that he was subject to unwelcome sexual harassment that was severe and pervasive,” a shortcoming that was fatal to his claim (Ferro v State of Rhode Island Department of Transportation, February 19, 2014, Smith, W).

Lewd comments. From the beginning of his employment at RIDOT, the employee and his trainer clashed. The employee alleged that his trainer made comments intimating a desire to engage in sexual conduct with him, inquired about his sex life with his wife, told coworkers that he had undergone a sex change operation, and implied that he was a homosexual who was engaged in a sexual relationship with the governor. The trainer also allegedly directed lewd gestures at the employee and on one occasion put his arm around him and asked if he wanted to kiss him.

No docile victim. For his part, the employee routinely stuck his middle finger up at the trainer, purchased a suggestive nightlight for him in the shape of a woman’s leg, engaged in frequent loud arguments with him, and suggested that he pour gasoline on himself and light a match.

Prior to his termination, the employee sent an email to a RIDOT supervisor accusing the trainer of, among other things, having “issues with sex and always making insulting sexual remarks.” During the ensuing investigation, the employee was described as an antagonist who participated in sexual conversations and joking. When RIDOT decided to transfer the employee to a different project, he slashed the tires on the trainer’s state-issued truck. He was terminated shortly thereafter. He then sued, alleging that he was subject to HWE sexual harassment and was inappropriately transferred in retaliation for reporting the harassment.

Sex discrimination. As an initial matter, the court noted that during his deposition, the employee disclaimed a theory of discrimination based on his sex, instead stating that he was discriminated against because of his status as a heterosexual. Taking these statements at face value, the court observed that they were fatal to his Title VII action, as the statute protects heterosexuals no more than it does homosexuals. Moreover, the court stated, even if it read his complaint and deposition testimony as alleging sexual harassment on the basis of “sex,” due to his allegations that the harassment he faced resulted from the trainer’s sexual desire for him, the claim would still fail.

Hostile work environment claim. Addressing the employee’s claim for sexual harassment based on a HWE, the court found that he was not subject to severe or pervasive harassment. The court first noted that “common sense and an appropriate sensitivity to social context” allows courts and juries to distinguish between simple teasing and roughhousing among members of the same sex and conduct that a reasonable person in the plaintiff’s position would find severely hostile or abusive. It then examined the “social impact of the complained-of behavior, applying an appropriate sensitivity to the social context of the workplace relations” between the two men. Looking realistically at the social context of an organization such as the RIDOT, the court pointed out that the employee acknowledged that in his experience in similar organizations employees often directed vulgar comments at one another.

Mindful of this “less-sensitive” social context, the court observed that there was no evidence that the alleged harassment was physically threatening or humiliating; to the contrary, the employee dealt with “mere inappropriate utterances.” Not only did he fail to allege that he felt intimidated by these exchanges, the undisputed record showed that his coworkers were physically afraid of him. Indeed, the court pointed out, it was the trainer who, when engaged in a confrontation with the employee, backed down. In addition, it was the employee who hurled a cup of hot coffee at the trainer from a moving car. Accordingly, summary judgment was appropriate on this claim.

Longer commute. Turning to the employee’s contention that he was transferred in retaliation for reporting the alleged harassment, the court pointed out that the transfer did not result in a change in pay or seniority. The employee argued, however, that it added time to his commute, and that part of the reason he took the job at the RIDOT was to work closer to home. He admitted, however, that when he accepted the job at RIDOT, he did not know in what town or location he would be working. Accordingly, the court because the transfer did not constitute an adverse employment action, this claim failed as well.

Final rules. Under the final regulations, once an individual is determined to be otherwise eligible for coverage under the plan terms, any waiting period may not exceed 90 days. All calendar days are counted beginning on the enrollment date, including weekends and holidays. Being otherwise eligible to enroll in a plan means having met the plan’s substantive eligibility conditions, for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan, or satisfying a reasonable and bona fide employment-based orientation.

The regulations also finalize amendments to existing regulations to conform to the ACA, including some of the portability provisions added by the Health Insurance Portability and Accountability Act of 1996, which have been superseded or otherwise require amendment due to the ACA. The 90-day waiting period limitation provisions apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. All other amendments apply for plan years beginning on or after April 24, 2014. For plan years beginning in 2014, the Departments will consider compliance with these final regulations to constitute compliance with Public Health Services (PHS) Act section 2708.20.

Proposed rules. The Departments have also issued proposed regulations that would provide that one month is the maximum allowed length of any reasonable and bona fide employment-based orientation period. During an orientation period, the Departments envision that an employer and employee could evaluate whether the employment situation was satisfactory for each party, and standard orientation and training processes would begin.

Under these proposed regulations, one month would be determined by adding one calendar month and subtracting one calendar day, measured from an employee’s start date in a position that is otherwise eligible for coverage. If a group health plan conditions eligibility on an employee’s having completed a reasonable and bona fide employment-based orientation period, the eligibility condition would not be considered to be designed to avoid compliance with the 90-day waiting period limitation if the orientation period did not exceed one month and the maximum 90-day waiting period would begin on the first day after the orientation period.

The Departments will consider compliance with these proposed regulations to constitute compliance with PHS Act section 2708 at least through the end of 2014. To the extent final regulations or other guidance with respect to the application of the 90-day waiting period limitation to orientation periods is more restrictive on plans and issuers, the final regulations or other guidance will not be effective prior to January 1, 2015, and will provide plans and issuers a reasonable time period to comply.

Comments. The Departments invite written comments on the proposed regulations and must be received by April 24, 2014. Comments may be submitted to the Labor Department via http://www.regulations.gov. Follow the instructions for submitting comments.

The Veterans’ Employment and Training Service (VETS) is proposing to amend its regulations which establish the VETS-100A reporting obligation and to rescind its regulations which establish the VETS-100 reporting obligation, according to a Notice of Proposed Rulemaking (NPRM) slated for publication in the February 24, 2014 edition of the Federal Register.

The agency is proposing to: (1) rescind the 41 CFR Part 61-250 regulations which establish the VETS-100 reporting obligation and; (2) revise the 41 CFR Part 61-300 regulations, which establish the VETS-100A reporting obligation, to require contractors and subcontractors to report the specified information for protected veterans in the aggregate rather than for each of the categories of veterans protected under the statute. The NPRM would also rename the annual report prescribed by Part 61-300 of the regulations the “Federal Contractor Veterans’ Employment Report VETS-4212” (VETS-4212 Report) and make changes to the methods for filing the report.

Background. The Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, (VEVRAA), 38 USC §4212(d), requires covered federal contractors to report annually to the Secretary of Labor on their employees and new hires who belong to the specific categories of veterans protected under the statute. The Jobs for Veterans Act of 2002 (JVA) made significant changes to VEVRAA that apply to contracts entered into on or after December 1, 2003. Among other changes, the JVA amended VEVRAA by: (1) raising the dollar amount threshold of the government contracts and subcontracts that are subject to the requirements of VEVRAA from $25,000 to $100,000; and (2) changing the categories of veterans protected under the law.

Prior to amendment by the JVA, VEVRAA required all covered contractors to report on incumbents who fall within the following veteran status categories: (1) veterans of the Vietnam era; (2) special disabled veterans; (3) other protected veterans; and (4) recently separated veterans. The JVA changed the reporting categories to: (1) disabled veterans; (2) other protected veterans; (3) Armed Forces service medal veterans; and (4) recently separated veterans. Additionally, the JVA requires federal contractors and subcontractors to report the total number of all current employees in each job category and at each hiring location.

The regulations at Part 60-250 implement the provisions of VEVRAA as they existed prior to the JVA. The Part 60-300 regulations implement the amendments made by the JVA to VEVRAA. The pre-JVA provisions of VEVRAA and the regulations in Part 60-250 continue to apply to contractors with contracts entered into before December 1, 2003. The JVA amendments, and thus the Part 60-300 regulations, are applicable only to contracts entered into on or after December 1, 2003.

Proposed changes. The NPRM proposes rescinding regulations at Part 60-250 because VETS believes the regulations have become obsolete. Contracts subject to the pre-JVA standards no longer exist, either because they have been modified, rendering them subject to the JVA standards, or have since ended, the Labor Department believes.

In addition, the NPRM proposes revising the annual report prescribed by the regulations at Part 60-300 (currently known as the VETS-100A report) to require contractors and subcontractors to report the specified information for protected veterans in the aggregate rather than for each of the categories of veterans protected under the statute. VETS is also proposing to rename the annual report prescribed by the regulations the “Federal Contractor Veterans’ Employment Report VETS-4212” (VETS-4212 Report).

Finally, the NPRM proposes to: (1) revise the section of the regulations that address the definitions of terms used in the regulations; (2) the text of the reporting requirements clause included in government contracts and subcontracts; (3) and the methods of filing the annual report on veterans’ employment.

VETS proposes that contractors begin complying with the reporting requirements in the revised regulations one year after the effective date of the final rule.