Second Quarter 2011



In this issue:

Legislative &
Regulatory Update

The Equal Employment Opportunity Commission (EEOC) Makes Headlines

The National Labor Relations Board (NLRB) Takes on Boeing

United States Department of Labor (DOL) Continues its Emphasis on Plan, Prevent, Protect

On Wisconsin

Litigation Update

Court Decisions and Settlements
of Note

New and Pending Litigation of Note

In the News

News from the Alternate Universe of Professional Sports

Published or quoted elsewhere:

Are Paid Internships Legal?

(Dime Crunch)

Loose Lips Sink Ships – Things That Can Get Educators in Legal Hot Water!

(Teachers.Net Gazette)

The Focus on Misclassification

(SBDC Front Page)

Hiring in the New Economy

(SBDC Front Page)

Understanding and Bridging
the Generational Gap

(WORK Spring, 2009)

What is the Role of an
Attorney on the Board?

(Compasspoint Board Café - February 28, 2008)

Also published in - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

(Wisconsin Lawyer - Vol. 81,
No. 2, February 2008)

Previous Issues

Legislative & Regulatory Update

The Equal Employment Opportunity Commission (EEOC) Makes Headlines

  • On March 25, 2011, the EEOC unveiled its regulations interpreting the Americans With Disabilities Amendments Act of 2008 ("ADAAA"). Consistent with the intent of the ADA Amendments themselves, these regulations greatly expand the definition of disability. See:
  • Employer take-away: The Amendments Act and these new regulations encourage employers and employees to quickly move beyond the question of whether an employee is a “qualified individual with a disability” to the question of whether the employee’s condition/limitations may be reasonably accommodated (or, for regulators, the question of whether the employee was, in fact, discriminated against).

  • The EEOC has taken a noticeably more aggressive posture against hiring protocols that might disqualify applicants based on background checks, credit checks, or a recent period of unemployment. While none of these factors are necessarily discriminatory on their face, the EEOC’s position is that hiring decisions based on such factors might have a “disparate impact” on minority, lower class, or older applicants. See:
  • Employer take-away: What are your “standard” hiring protocols and what are they based on (e.g. free or inexpensive, always done that way, etc.)? Do these protocols provide you with information that is actually germane to the ultimate hiring decision? Could it be that certain protocols are justifiable for a certain level of job (e.g. cash handling), but not for others?

The National Labor Relations Board (NLRB)
Takes on Boeing

  • Last week, the National Labor Relations Board brought a case against Boeing Co., claiming the aircraft maker violated federal labor law by building a production line for its 787 Dreamliner at a non-union plant in South Carolina (including a $2 billion investment in the plant and 1,000 new employees hired). The NLRB alleges that Boeing did so in retaliation against union employees at its plant in Washington State for their past strikes. The remedy sought: Moving all work back to the unionized plant in Washington State.
  • Employer take-away: With the new administration comes a new approach to questions ranging from traditional labor issues to new frontiers (employee Internet use, electronic voting in union elections, etc.). See regarding a recent settlement between the NLRB and a Connecticut ambulance service over the firing of one of its employees for her Facebook postings.

United States Department of Labor (DOL) Continues its Emphasis on Plan, Prevent, Protect

We are approaching the first anniversary of the United States Department of Labor’s announcement of its new regulatory agenda – Plan, Prevent, Protect. The theory behind this program is that employers should: (1) have a plan for “finding and fixing” legal violations and risks to employees; (2) be able to demonstrate implementation of the plan (i.e. not just a plan on paper); and (3) be able to verify that the plan’s objectives are being met. The DOL includes, for example, the Occupational Safety and Health Administration (OSHA), the Office of Federal Contract Compliance Programs (OFCCP), and the Wage and Hour Division (WHD) – each of which are expected to issue their own regulations specific to the compliance issues they confront.

Employer take-away: The DOL is telling employers that the burden is on them to “find and fix” issues, as opposed to waiting until issues (i.e. accidents or claims) arise – and that there will be penalties for failing to do so. Much like recent developments with respect to E-verify (the obligation for employers to confirm an employee’s information and legal right to work), this program reminds employers that they have an obligation to be proactive. How are you doing?

On Wisconsin

Our update would not be complete without a few words about the situation here in Wisconsin. That said, with Governor Walker’s proposed legislation on appeal to the Supreme Court, another lawsuit pending before a Dane County judge, at least eight recall elections sought, and a recount of the Supreme Court race – well, there are more questions than answers. What we do know is this:

  • Senate Bill 23 is now law. This law prohibits municipalities from offering benefits more generous than Wisconsin’s Family and Medical Leave Act (WFMLA) -- effectively nullifying the proposed Milwaukee Paid Sick Leave Ordinance.
  • Senate Bill 8 is still working its way through the legislative process. This Bill would conform Wisconsin’s WFMLA to the Federal FMLA. At present, there are a variety of differences between the two, undoubtedly causing headaches for HR administrators statewide.
  • Effective January 1, 2011, Health Savings Account (HSA) contributions and earnings are no longer subject to Wisconsin income taxes. This was one of the first pieces of legislation signed by Governor Walker. Prior to that, Wisconsin was just one of four states that did not exempt HSA’s from state tax.

Litigation Update

Court Decisions and Settlements of Note

  • The Village of Germantown recently settled a sexual harassment claim filed by a former Village employee for $75,000.00. The former employee alleged she was retaliated against for speaking up about sexually suggestive comments, inappropriate touching, and personal requests outside work hours – all by the then-Village President. She also claimed that she went to other Village officials with her complaints, but they did nothing to either investigate or end the alleged conduct.
  • A Milwaukee company, Durable Contract Services, recently settled a claim of alleged pregnancy discrimination by paying $35,000.00 to the claimant and agreeing to provide training to employees on the subject of leave law. The company terminated the claimant less than a week after she notified the company of her pregnancy, but claimed that the termination was based on her attendance record and other issues.
  • An African-American employee of Xerox won at trial on her claim that Xerox demoted her in retaliation for complaints of discrimination. The jury awarded her almost $500,000.00 in lost wages and over $300,000.00 in lost future income.

New and Pending Litigation of Note

  • Lawsuits are pending against Cigna and Toshiba, each claiming over $100 million in damages and seeking class action status. In the Cigna suit, the plaintiff claims “pervasive gender discrimination” that prevented her from advancement (despite exceptional performance reviews) as well as open gender hostility from male co-workers. The Toshiba suit comes on the heels of a question at Toshiba’s annual meeting last June regarding why Toshiba didn’t have any female executives. Toshiba’s response: It hadn’t found “appropriate candidates.”
  • A lawsuit against Delta Air Lines has been filed by flight attendants who previously worked for Northwest Airlines (the two airlines merged in 2009). As Delta flight attendants are not unionized, the NWA flight attendants claim they have been discriminated against based upon their union status. Pending the outcome of this suit, Delta must abide two sets of work rules – one consistent with the NWA flight attendants’ collective bargaining agreement and another for all other flight attendants.
  • A lawsuit was recently filed against a Reedsburg McDonald’s restaurant on behalf of a class of female employees who claim they were subjected to sexual comments, propositions, and inappropriate touching. As is often the case in such settings, a number of the plaintiffs are high school students.

Employer take-away: As stated before in this space, while the issues are often variations on the same themes, the stakes appear to be higher than ever. Look for an increase in class and collective actions in coming months and years. The sole exception may be the Dukes v. Wal-Mart case (a ten year old case based on allegations that Wal-Mart prevented female employees from rising above the level of assistant store manager). The case was finally heard by the United States Supreme Court late last month. Judging by the Justices’ questions at oral argument, they seem skeptical about whether the case can continue as a class action. Look for a ruling by the end of June.

In the News

News from the Alternate Universe of Professional Sports

NFL owners and players continue to battle over how to equitably split approximately $9 billion dollars in annual revenue. On Monday of this week, a Minnesota District Court Judge handed the players a victory by granting their request for a temporary injunction - basically precluding the owners from locking them out in the off season. The owners have appealed. A few thoughts:

  • This ruling throws the owners into a frenzy with respect to free agency and off-season transactions (resuming potentially this week), the draft (scheduled for Thursday night), and the financial issues that prompted the lawsuit in the first place. Although there seems to be consensus that the ruling was not a surprise, early indications are that the owners were unprepared for it.
  • The players are also scrambling. Having decertified as a union (for strategic reasons), they now must confront what that means for each of them individually going forward, whether to report for off-season conditioning, etc. What’s more, players and former players may be battling amongst themselves. See:
  • This is a second victory for the players – the first being a ruling that the owners could not use money from a television contract to pay down bills during the lockout. See:
  • For more on the NFL situation, see:

On the Major League Baseball front, paternity leave is now official policy. Last week, Texas Rangers pitcher Colby Lewis was the first to take leave under the new policy. While some teams granted players leave informally in the past, it became controversial for players on teams approaching the playoffs (or fans thinking about players’ high salaries and a relatively short season). See:

Employer take-away: We must be cautious about looking for lessons from these circumstances, as the world of top-tier athletes is so very different from most workplaces. If there is not a 2011-2012 NFL season, at least we’ll have some fascinating legal wrangling to keep us entertained. Small solace, we know.

We'd love to hear your feedback. Send comments to Mark Goldstein.


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