The U.S. Supreme Court issued its long-awaited decision in Wal-Mart Stores, Inc. v. Dukes, --- U.S. ---, No. 10-277 (June 20, 2011), ruling that the plaintiffs, who had proposed a class of an estimated 1.5 million members, could not proceed with their sex discrimination case as a class action. The decision was based on two specific requirements of Rule 23 of the Federal Rules of Civil Procedure – requirements that had been largely disregarded by some courts in employment discrimination cases. The Court’s enforcement of these requirements bodes well for employers faced with future class actions and will not likely interfere with the assertion of legitimate claims.
First Amendment's Petition Clause Only Protects Government Employee Conduct that "Relates to A Matter of Public Concern"
In Borough of Duryea v. Guarnieri, --- U.S. ---, No. 09-1476 (June 20,2011), the U.S. Supreme Court considered whether a public employer’s alleged retaliation against an employee who succeeded in having his employer’s adverse employment action overturned in a union grievance process could be redressed under the First Amendment’s Petition Clause. In the course of deciding the plaintiff employee had no cause of action because his grievance was a “petition” regarding a private matter, the Supreme Court announced a broad rule that the Petition Clause only applies if an employee’s “petition” relates to a matter of public concern.
When Both Frivolous and Non-Frivolous Claims are Brought, Defendant's Victory on Frivolous Claims May Justify Partial Attorney Fee Award Defendants that prevail in certain discrimination cases are entitled to attorney fee awards, against their opposing plaintiffs, under the Civil Rights Attorney’s Fees Awards Act, 42 U.S.C. § 1988(b), when the plaintiffs’ claims are determined to be “frivolous, unreasonable, or without foundation.” But what if both frivolous and non-frivolous claims are asserted by a plaintiff? In Fox v. Vice, --- U.S. ---, No. 10-114 (June 6, 2011), the U.S. Supreme Court eliminated the conflicting approaches of the courts of appeals in such situations, holding that – in such a case – the prevailing defendant should be awarded the fees it would not have incurred but for the frivolous claims. This simple ruling belies some surprising applications, as described by the unanimous Court.
NLRB Announces Intent to Regulate New Election Procedures Designed to Help Unions Win More Elections
In the wake of the legislative defeat of the Employee Free Choice Act (“EFCA”) in Congress, the National Labor Relations Board (“NLRB”), is attempting to rewrite its election regulations in an attempt to produce the same result intended by the proponents of EFCA – make America more unionized. See, 76 Federal Register 36812 (June 22, 2011). The NLRB’s assault on employee choice and, arguably, its own statute is embodied in 146 pages of proposed regulations that effectively eliminate the employer from the election process. The public has but 60 days to comment on the most sweeping regulatory change to the current process, which has been operating equitably and effectively for decades.
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DOL Proposes Rule to Expand Scope of "Persuader" Activity and Increase Reporting by Employers and Others
On June 21, 2011, the U.S. Department of Labor, Office of Labor-Management Services announced a notice of proposed rulemaking that would significantly revise so-called “persuader” regulations under the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”) and compel increased employer reporting. The proposed rule could substantially impact employers dealing with employees on the subject of unions and is yet another regulatory attempt to make it easier for unions to organize workers, increase membership dues, and fund their political activities. The comment period for the proposed rule runs through August 22, 2011. The public can submit comments to the proposed rule online at http://www.regulations.gov/.
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WARN Act Does Not Apply to Replacement Workers when Strikers Return to Work
The federal labor laws give employers the right to operate with replacement employees during a strike. At the end of the labor dispute, employers typically reinstate the strikers, either because they are ordered to do so by the National Labor Relations Board or the courts, or because they voluntarily agree to do so. In either event, the reinstatement of the strikers normally means the displacement of the replacement workers. (See NFL Strike, version 1987.)
When an employer releases a large group of replacement workers in such a situation, must the employer give the workers 60 days’ advance notice under the WARN Act, 28 U.S.C. § 2101(a)(3)? The Eighth Circuit Court of Appeals, the second federal appeals court to consider the issue, has ruled that the WARN Act is not applicable. Sanders v. Kohler Co., No. 10-1848 (8th Cir. June 8, 2011).
Unemployment Benefits Awarded to Medical Marijuana User Fired for Positive Drug Test Results
The Colorado Court of Appeals has ruled that the evidence presented by an employer at a claims hearing fell short of proving a sufficient basis for the denial of unemployment benefits to a discharged medical marijuana user who tested positive in an employer’s drug screen. Sosa v. Industrial Claim Appeals Office, Case No. 10CA1671, --- P.3d --- (Colo. App. July 7, 2011). Although the outcome is disappointing for employers, the decision implies (while not saying so explicitly) that such benefits will be denied in similar situations if employers present some readily available evidence in the trials of such claims.
Colorado Supreme Court Ruling Resuscitates Non-Compete-Type Agreements with Current Employees
Colorado employers that wish to implement non-competition, non-disclosure and non-solicitation agreements with their incumbent employees have, until recently, faced an obstacle in the form of a 2009 Court of Appeals’ decision stating that an at-will worker’s continuation of employment was not sufficient consideration for such an agreement. In other words, the at-will worker’s employer was required to provide that worker a lump-sum payment, a new benefit, or some other form of consideration for its agreement. This requirement sometimes created tense situations where incumbent workers, presented with these new agreements, refused to sign them and rejected the offered consideration.
The Colorado Supreme Court, however, unanimously reversed the 2009 decision recently, ruling that the continued employment of an at-will employee after the employee signs a non-compete or similar agreement is sufficient consideration for the agreement. Lucht's Concrete Pumping, Inc. v. Horner, Case 09SC627 (May 31, 2011).
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New Reporting Requirements for Insurers Will Affect Many Employers By Ed Butler
Beginning October 1, 2011, primary insurers will assume responsibility for reporting to the federal government any payments (lump sum or installment) made to Medicare recipients who have alleged bodily injury or emotional distress. Primary insurers include group health plan insurers, liability insurers (including self-insurers), no-fault insurers, and workers’ compensation insurers. Such reporting is mandatory, regardless of whether there has been a determination of liability, and includes any settlement in which the primary insurer accepts responsibility for paying an individual's ongoing or future medical expenses.
Sherman & Howard Successes
Sherman & Howard announces that John Alan Doran, formerly a partner with Greenberg Traurig, has joined the Firm as a member of the Phoenix office. John joins the Firm's Labor & Employment Law Department. He brings more than 20 years of experience serving employers, primarily in the areas of labor and employment law client counseling, trials and appeals. John’s experience includes mass employment and wage/hour class and collective action litigation; employment discrimination and wrongful termination litigation; ERISA litigation; non-competition, trade secret, and unfair competition litigation; labor arbitrations; traditional labor law and union avoidance; and OSHA compliance and defense. As an appellate lawyer, he has argued multiple cases to the Arizona Supreme Court and the Arizona Court of Appeals, as well as dozens of cases in the federal appellate system.
Chambers USA gives John its highest rating in labor and employment law. He is also recognized by Best Lawyers and has been included among the "Best of the Bar" in Arizona. He is nationally recognized as a lecturer in labor and employment and a regular instructor for the National Institute of Trial Advocacy. John received his law degree from Vanderbilt University in 1988. He received his undergraduate degree from Loyola Marymount University in 1985. He may be contacted at (602) 240-3032. Click here to read more about John.
Fourteen Sherman & Howard lawyers and seven Sherman & Howard practice areas stood out among Colorado lawyers and law firms in the 2011 release of Chambers USA – America's Leading Lawyers for Business. Based on client and peer interviews, Chambers gave Sherman & Howard's Labor & Employment Law Department its highest ranking, and singled out Ray Deeny, Chuck Newcom, Ted Olsen and Bernie Siebert for excellence in client service. Likewise, Kathy Odle and Mike Sanchez were recognized for their performance in Employee Benefits law. Chambers also praised our Firm's Real Estate, Construction, Corporate, Litigation and Environmental attorneys and practices.
In one of the first decisions in the state on the subject, Glenn Schlabs won a motion to dismiss the claim of a medical marijuana user who was fired by his employer for testing positive in a drug screen. The discharged employee argued that he was discharged because of his “lawful off-duty” activity, in violation of Colo. Rev. Stat. § 24-34-402.5. Glenn persuaded the El Paso County District Court that, because marijuana remains an unlawful controlled substance under federal law, the plaintiff had not engaged in “lawful” activity within the meaning of the statute. He also successfully contended that the Colorado medical marijuana laws are strictly intended to immunize medical marijuana users from prosecution for certain activities under state criminal law, not to make marijuana use legal.
Bill Wright and Elizabeth Chilcoat obtained summary judgment for an employer in an Americans with Disabilities Act and Family and Medical Leave Act retaliation case. The U.S. District Court dismissed the plaintiff's ADA claim because the employee was not disabled and could not reasonably believe that she was. The court rejected the FMLA claim, finding that disciplinary warnings, revocation of telecommuting privileges, and mandatory re-training were not materially adverse actions.
Mike Grubbs, Rose McCaffrey, Bill Wright and Patrick Scully recently led a roundtable discussion with employers about the current legal developments arising from employees’ use of social media, including the NLRB’s prosecution of employers who discipline employees for social media postings.
Ted Olsen spoke on “Preparing for and Protecting Against Violence in the Workplace,” at the annual Employment Law Conference sponsored by the Colorado Bar Association Labor and Employment Law Section. Ted’s speech focused on evolving state laws giving employees greater rights to bring firearms and ammunition to the workplace, and how employers should fully assert their rights under such laws. Also appearing on the topic was John Nicoletti, Ph.D., a nationally recognized consultant on identifying dangerous individuals and preventing workplace violence.
If you have any questions, please contact any member of the Sherman & Howard Labor & Employment Team: