Fourth Quarter 2010

 

Home

In this issue:

Legislative Update

Wisconsin Department of Workforce Development to have increased authority

Independent contractor status in Wisconsin

Litigation Update

Court decisions and settlements of note

New and pending litigation of note

In the News

The Employment Mismatch

Department of Labor enforcement data now available online

Claims of a different color

The Strangest Things We’ve Heard of Late

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 Blueavocado.org - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

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

Previous Issues

Legislative Update

Wisconsin Department of Workforce Development to have increased authority

Effective January 1, 2011, the Wisconsin Department of Workforce Development (DWD) will have increased authority to investigate and enforce worker misclassification (employee v. independent contractor) in the construction industry. One provision of the new law (2009 Wisconsin Act 292) allows the DWD to issue stop work orders prior to a hearing or determination, effectively halting any construction project allegedly in violation. http://www.legis.state.wi.us/2009/data/SB-672.pdf.

Independent contractor status in Wisconsin

Effective July 4, 2010, the standard for independent contractors under Wisconsin's Unemployment Insurance law changed. Previously, an “independent contractor” was required to meet seven of ten criteria (criteria that were nearly identical to those in the Worker’s Compensation statute). Under the new law (2009 Wisconsin Act 287), an "independent contractor" must satisfy an entirely different test, meaning that there are now three distinct sets of criteria that independent contractors working in Wisconsin must meet – Wisconsin’s Worker’s Compensation test, Wisconsin’s Unemployment Compensation test and the Federal test. For more information, you can view the marked up Assembly Bill at http://www.legis.state.wi.us/2009/data/acts/09Act287.pdf or the new Unemployment Insurance test at http://www.legis.state.wi.us/statutes/Stat0108.pdf.

Litigation Update

Court decisions and settlements of note

  • A recent Wisconsin Supreme Court decision against Menard, Inc., held that an employee was entitled “front pay” in lieu of reinstatement because reinstatement was not feasible. John Menard, founder and president of Menard, Inc., hired Dawn Sands (his then-girlfriend’s sister) as an attorney for the company. Issues arose with respect to Ms. Sands’ compensation, and Ms. Sands ultimately claimed that she was being paid less than men doing comparable work. Mr. Menard abruptly terminated her, and she sued for discrimination and retaliation. The lower court ruled that Ms. Sands was entitled $1.7 million plus reinstatement. Menard paid the settlement but refused reinstatement. The Supreme Court’s decision that reinstatement was not feasible means that the case will now return to the lower court for a calculation of front pay.
  • An Ohio temporary agency agreed to pay $650,000 to settle allegations that it used code words to profile applicants relative to their race, sex, age, etc. The agency allegedly used phrases such as “chocolate cupcake,” “hockey player” and “small hands” to refer to African American women, young white males and women respectively.
  • Kraft Foods was ordered to compensate employees working at its Oscar Mayer plant in Madison for putting on and taking off (“donning and doffing”) hair and beard nets. It is noteworthy that Kraft and the union had previously agreed to consider such “donning and doffing time” non-compensable in exchange for an increased wage rate. A few employees, unhappy with the tradeoff, sued Kraft Foods. The Court ruled that a company and bargaining unit cannot, by striking such a deal, sidestep state law on the subject of compensable time. Accordingly, Kraft Foods is now obligated for unpaid “donning and doffing time” (estimated at $2.2 million) as well as the higher wage rate it agreed to in the tradeoff.
  • Dresser Waukesha/Waukesha Engine recently agreed to pay $1.1 million to settle a racial discrimination lawsuit. The claim was brought by African American applicants who alleged they were discriminated against in hiring and promotions.

New and pending litigation of note

  • A group of employees and former employees of Dick’s Sporting Goods, Inc., have filed suit against the company, alleging they were required to work overtime without compensation and to agree to a sort of mandated flex time (averaging hours over two or more weeks). The suit alleges that Dick’s budget for payroll was so aggressive that it could only be met by these “unconventional” measures.
  • The Equal Employment Opportunity Commission’s Milwaukee office filed two lawsuits of note late last month. In the first, the EEOC sued Thrivent Financial for Lutherans under the Americans with Disabilities Act for allegedly disclosing to prospective employers that a temporary worker suffered migraines. In the second, the EEOC sued Chubb & Son, Inc. for allegedly retaliating against an employee (by passing her over for a job) because she filed a discrimination charge against the company. Both lawsuits are pending in Federal Court in Milwaukee, Wisconsin.
  • Oshkosh Corporation’s former plant manager and manager of global systems manufacturing has filed a claim stating that he was fired after raising issues of racial and sexual discrimination and sexual harassment. The plaintiff claims he was not given any reason for his termination.
  • Wal-Mart has asked the United States Supreme Court to intervene in a class-action lawsuit involving more than 1.5 million current and former female employees. The case, Dukes v. Wal-Mart, is based on allegations that Wal-Mart prevented female employees from rising above the level of assistant store manager. The case has already been in the courts for approximately ten years. The present issue is whether the case can proceed as a class action (or whether the individuals, all 1.5 million of them, must bring their cases individually). Not surprising in this day and age, the case now has its own Wikipedia page (http://en.wikipedia.org/wiki/Dukes_v._Wal-Mart_Stores,_Inc).

In the News

The Employment Mismatch

According to a recent Manpower poll, one in seven U.S. employers had difficulty filling key positions last year. “The issue is not a lack of candidates, but rather a talent mismatch,” according to Jonas Prising of Manpower. The gap between openings and qualified candidates, which amounts to as many as three million unfilled jobs in the US, suggests that “the United States is fragmented like never before into myriad sectors that move in different speeds and directions, meaning candidates with sought-after skills can get multiple job offers at the same time that others with commodity skills wait for years.” See: http://www.jsonline.com/business/102677514.html

Department of Labor enforcement data now available online

Wondering what OSHA, the OFCCP, or the Department of Labor’s Wage & Hour Division have been up to in Milwaukee or elsewhere? The DOL’s searchable “enforcement database” (http://ogesdw.dol.gov/index.php) provides access to information regarding recent on-site visits, investigations, other enforcement efforts and results.

Claims of a different color

Looksism – is “hot” a legitimate hiring criteria?

Retailers such as American Apparel and Abercrombie & Fitch were recently accused of making decisions about hiring and firing not based on resumes but rather the applicants’ looks (with the term “off-brand” as code for overweight or ugly). American Apparel contends that applicants are screened for style, not physical attractiveness.

Of course, you say. You’ll not be surprised to hear that the same logic also explains differing wage rates or opportunities for promotion. The question becomes this: When does the line between an applicant’s style and physical attractiveness become blurred? And, has the company’s criteria for “on-brand” or “off-brand” been sufficiently articulated and communicated to those doing the hiring?

Employer takeaway: How do you define “on” and “off-brand?” How have you communicated these concepts to those doing the hiring? How do you check to ensure that hiring decisions are, in fact, consistent with the company concept of “brand” (as opposed to creating a record of discrimination)?

Texting as "work"

The Fair Labor Standards Act (FLSA) contains no definition of ‘‘work,” stating only that non-exempt employees must be compensated for all “hours worked” and at time and a half for hours in excess of 40 hours per workweek.

So what does this mean for non-exempt employees texting and e-mailing co-employees, vendors and customers at all hours of the day and night? Quite simply, the time is compensable and represents a huge (albeit difficult to track and calculate) area of exposure for FLSA purposes.

Employer takeaway: This is another issue to consider for non-exempt employees:

  • who have company-provided mobile phones
  • for whom mobile phone charges are company-subsidized
  • who are expected to be available by text or mobile phone

The Strangest Things We’ve Heard of Late

With such a beautiful summer and fall, it is no surprise to hear that it was also a good harvest for many of the nation’s farmers.

How good was it?

Some Iowa corn farmers report that they had to lay off teens hired to detassel corn because the teens could not reach the tops of the corn plants. Ruth Lammers, of Davenport, Iowa, reacted to the layoff of her grandson: “He’s 5 feet 9 inches tall, and I was worried that maybe he was goofing off. They told me that he wasn’t a problem, that he and some of the kids just couldn’t reach the tassels and were worried that the stalks would be bent or broken.” A new frontier for discrimination or accommodation actions?

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