Kentucky Employment Law Notes

New DOL Opinion Letter Regarding Time Spent "Washing Up" Before Lunch.

The DOL has released a "Non-Administrator" opinion regarding whether time spent traveling to a location to wash before a meal break, as well as the time spent on that break, constitutes compensable work time under the Fair Labor Standards Act (FLSA).  The answer is mostly, "no," although this case involved a CBA, so read it for what it's worth.  The letter is here.

Note, this is a Non-Administrator opinion, as opposed to an Administrator opinion.  The DOL explains the difference on its web-site as follows:

An opinion letter signed by the Administrator of the Wage and Hour Division is an official ruling or interpretation of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. 259. Such rulings provide a potential good faith reliance defense for violations of the FLSA.  In the event of a vacancy in the Administrator's position an opinion letter signed by the Acting Administrator, Deputy Administrator, or other officer of the Department of Labor  to whom authority was properly delegated under Reorganization Plan No.6 of 1950 (15 F.R. 3174) also constitutes an official ruling of the Wage and Hour Division for purposes of the Portal-to-Portal Act. Opinions signed by other Wage and Hour officials (i.e. Non-Administrator letters), denoted by an NA following the opinion number; do not constitute rulings or interpretations under the Portal-to-Portal Act.

6th Circuit Affirms SJ In Age Case

Today in Preston v. Clayton Homes, Inc., the 6th Circuit affirmed the E.D.Ky.'s summary judgment dismissing Preston's age discrimination case.  The 6th Circuit concluded the District Court did not err by refusing to consider Preston's affidavit submitted in response to Clayton Homes' summary judgment because it was inconsistent with his deposition testimony.  The 6th Circuit found that a "didn't fit the mold" comment was not direct evidence of age discrimination, and that Preston could not offer sufficient evidence of pretext to rebut the reason stated by Clayton Homes for his discharge.

EEOC Implements Final Revisions To EEO-1 Report

Click here to read the EEOC press release regarding the revised EEO-1.  The new format will be required for the first time for the 2007 survey, which is due by September 30, 2007. Employers are expected to use the current format for their 2006 EEO-1 submissions. The new report format, Instructions, and explanation can be found on the EEOC’s web site at www.eeoc.gov/eeo1/index.html.

No "Wrongful Interference With Unemployment Insurance Claim" In Kentucky

On January 24, 2006, Judge Forester granted defendant's motion for summary judgment dismissing all of plaintiff's claims in McGuire v. Bourbon Community Hospital.  One of those claims was that defendant had wrongfully attempted to prevent the plaintiff from receiving unemployment benefit compensation.  Thankfully, Judge Forester had little trouble dismissing this claim. He stated,

To the extent that the plaintiff means to challenge the unemployment compensation benefits ultimately awarded to her, it appears that this Court does not have jurisdiction. K.R.S. $ 341.450(1) (allowing appeal from Commissioner’s decision only in the Circuit Court of the county in which the claimant was last employed). If the plaintiff intended to bring a different challenge, it is not clear to the Court exactly how the defendant wrongly interfered with the plaintiffs attempts to obtain unemployment compensation benefits. If it is the plaintiffs suggestion that opposing an application and providing information in response to an agency request were sufficient to establish unlawful interference by an employer, then all employee applications would be automatically approved and an employer would never have an opportunity to oppose them. This would make no sense.

Here is the decision: Download McGuire12506.pdf

Termination of Severance Pay Policy

In Opauski v. Pikeville Coal Co., Judge Caldwell (E.D.KY) granted Pikeville Coal Co.'s motion for summary judgment dismissing plaintiff's complaint that the company illegally terminated its severance pay policy.  The Court noted "it is now well-established that severance benefit plans .. are welfare benefit plans."  In this case, the Court found no violation of ERISA related to the company's termination of the severance pay policy because it was not done shortly before the termination of a group of employees.  I think that the key thing about this case is that it highlights the importance of taking a moment to review all the facts and law whenever a company decides to discontinue or not apply a severance pay policy.  The decision is here: Download Opauski12706.pdf

Challenge The Outrage Complaint For Lack Of Specificity?

Often the allegations made in a complaint do not, even assuming they are true, support the outrage claim made later therein.  In Weiss v. Northwest Airlines, Inc., issued 1/20/06, Judge Heyburn ordered the plaintiffs to file an amended complaint setting forth with greater specificity their allegations concerning their outrage claim against defendants. Judge Heyburn ordered that, "The failure of any of the current plaintiffs to meet the required specificity of allegations that support a claim of intentional infliction of emotional distress will result in dismissal of those claims."  The plaintiffs claimed that defendants' motion was premature given that discovery had not begun.  Judge Heyburn responded, "The facts which might support such a claim should be within the control of Plaintiffs. After all, a prerequisite for such a claim concerns the Defendants' actions upon Plaintiffs."  Query whether this approach simply educates the plaintiffs and will ultimately make a dispositive motion harder to obtain?  Where outrage will be the only claim left in a case, then I agree with the approach taken in this case because the plaintiffs would likely focus on the claim anyway and a more specific complaint gives defendants a more defined target to shoot at.  If outrage was one of many claims, then I would not raise the issue and hope plaintiffs have not done their homework prior to depositions.
The decision is here: Download Weiss12006.pdf

Current Labor & Employment Bills In General Assembly

Coal miner safety, drug and alcohol testing, requirements for - HB 404 miners, proclaim May 1 of each year as coal miners recognition day - HJR 101

Collective bargaining for public employees, establish process for - HB 467 bargaining, include senior dispatch communication officers of an urban-county government - HB 440

Conveyor belt inspection, to be done by certified and trained person - HB 458

Creation of certain form to be filled out by employers and employees, responsibility of - HB 89

Education institutions, construction, exempt from paying prevailing wage - HB 64 institutions, prevailing wage, exempt from - HB 378: HFA (2)

Electrician licensing, exempting employees of natural gas pipeline facilities from - HB 385

Employers, health benefits for - HB 98

Genetic testing, prohibition against employer's use of - HB 49

Helmets to Hardhats Program, encourage commitment - HR 122

Human trafficking - SB 11

Illegal aliens, prohibit employment of - HB 150

Labor organization, mandatory membership or financial support prohibited, penalty - HB 38

Limited Liability Company Act, omnibus revisions - HB 349

Minimum wage and overtime, delete agriculture exemption - HB 378: HFA (6) wage and overtime, delete newspaper delivery exemption - HB 378: HFA (4) wage revision - HB 378 wage, federal indexing deleted - HB 378: HFA (5) wage, state preemption - HB 378: HFA (1) wage, tip credit deletion - HB 460

Ohio County, honoring citizens for dedication to youth building marketable skills - SR 117

OSH standards, board meetings and duties of the chairman, provisions for - HB 387

Prevailing wage, repeal of - HB 217

Prison Industries Enhancement Program, create - SB 119

Sex-based wage discrimination, prohibited on comparable jobs - HB 399

Sexual orientation and gender identity, discrimination based on, prohibit - HB 369

Skills training investment credit, expansion of - SB 126

Work injury, heart or respiratory disease in firefighters, create rebuttable presumption for - HB 420

Workers' compensation special fund assessment and membership change of funding commission - HB 388 compensation unfair claims practices, increase penalties for - HB 97

Comair mechanics agree to pay, pension concessions

Link: AP Wire | 01/27/2006 | Comair mechanics agree to pay, pension concessions.

6th Circuit Upholds Dismissal Of Whistle-Blower Claim

Today in Belt v. US DOL, the 6th Circuit affirmed the Administrative Review Board's dismissal of Belt's Energy Reorganization Act Whistle-Blower claim.

6th Circuit Publishes An Important Arbitration Award Review Decision

Today in Michigan Family Resources, Inc. v. SEIU, Local 517M, the 6th Circuit (Daughtrey, Gilman, and Sutton) affirmed an Ohio District Court's decision to vacate an arbitration award. The case is important not because of the underlying dispute, but rather because of the analysis the Court used to affirm the vacancy.   Most labor practitioners know that the standard for reviewing arbitration awards is "one of the narrowest standards of judicial review in all of American jurisprudence."  Although the reviewing court's review "is not toothless," according to the Supreme Court, as long as the award "draws its essence from the collective bargaining agreement," it should be upheld.

The 6th Circuit has developed a test to determine if "an award draws its essence from the collective bargaining agreement."  The test is that the award will be deemed not to draw its essence from the CBA if:

“(1) it conflicts with express terms of the agreement; (2) it imposes additional requirements not expressly provided for in the agreement; (3) it is not rationally supported by or derived from the agreement; or (4) it is based on general considerations of fairness and equity instead of the exact terms of the agreement.”

Winning parties (of the underlying arbitration) often argue that this test is too broad and gives the losing party more outs than the Supreme Court intended.  In Mich. Family Resources, the Court applied this test and agreed with the District Court that the underlying award did not draw it essence from the CBA because it imposed additional requirements and also because the Arbitrator considered extrinsic evidence of intent when the disputed language was unambiguous.  That is not so noteworthy. What makes the case significant is that the panel specifically invited the Union to file a petition for rehearing en banc so that the 6th Circuit four-part test could be revisited and perhaps eliminated.  The panel not only invited the petition, but openly stated its support for such a rehearing.

The case also is worth bookmarking because it contains an extensive appendix of 6th Circuit cases which have upheld and vacated arbitration awards.

Mixed Unemployment Numbers For Kentucky In December, 2005

According to this press release, unemployment numbers in Kentucky were mixed in December, 2005.  Counting farm jobs, there was a net increase in the unemployment rate.  There was, however, a decrease in the unemployment rate not counting farm jobs.  The press release has more details regarding various sectors.

Louisville Firefighters union votes down offer from city

Link to the C-J article: Firefighters union votes down offer from city.

Report Finds That Kentucky Is "The Black Sheep Of The South"

New report Link: Lexington Herald-Leader | 01/25/2006 | Study: Right to work aids states.

OFCCP "Internet Applicant" Rule

The new OFCCP "Internet Applicant" rule will go into effect on February 6, 2006.  Click here to go to the DOL FAQ page regarding the new rule.  Here is a nice summary question:

How does this Internet Applicant rule change existing rules?

The final rule:

• Defines "Internet Applicants," job seekers applying for work through the Internet or related electronic data technologies from whom contractors must solicit demographic information;
• Prescribes the records contractors must maintain about hiring done through use of the Internet or related electronic data technologies; and,
• Explains the records OFCCP will require contractors to produce when evaluating whether a contractor has maintained information on impact and conducted an adverse impact analysis under 41 CFR Part 60-3, the Uniform Guidelines on Employee Selection Procedures.

Lexmark Freezes Pension

Lexington Herald-Leader | 01/24/2006 | Lexmark will cut 200 Lexington jobs, 625 elsewhere in wake of lower earnings.

6th Circuit Employment Cases

The 6th Circuit issued three employment related decisions today: Reeb v. Ohio Department of Rehabilitation, Scott v. Firstmerit Corp., and Hall v. Consol of Kentucky.  Reeb addresses Title VII class action issues.  Scott is a race and ADA case.  Hall is the only case originating in Kentucky.

Hall is a pretty straight forward wrongful termination / outrage / breach of implied employment contract case.  The 6th Circuit affirmed the E.D.Ky's Summary Judgment on all claims.  Hall was allegedly fired for taking pictures of a work scene to be used by another employee in support of the other employee's workers' compensation claim.  Hall attempted to support his wrongful termination claim by citing to the alleged “strong public policy against employers . . . from retaliating against employees . . . who are parties, witnesses, or persons otherwise involved in litigation against the employer....”  The Court did a nice job of focusing on the narrow scope of wrongful termination claims.  It concluded:

Contrary to Hall’s assertion, this case does not turn on whether his discharge was against some broad public policy, or whether any statutes may imply a policy against terminating employees in Hall’s position. As previously discussed, courts applying Grzyb have limited their analysis to whether the discharge was for the employee’s failure or refusal to violate a law in the course of employment, or whether the reason for the discharge was the employee’s exercise of a right conferred by well-established legislative enactment.

The Court found Hall had not attempted to exercise any such right and dismissed his claim.

Ford Does Not Target Louisville

Louisville's plants were not among those identified by Ford today for job losses.  Click here to read the Courier-Journal article.

New DOL Opinion Letters

FLSA2006-3	Transportation of pallets and kegs under section 13(b)(1)
FLSA2006-2	Code compliance officer who volunteers as a reserve police officer and section 3(e)(4)(A)
FLSA2006-1	Tips charged on a credit card and section 3(m)

Current Labor & Employment Bills In The General Assembly

Coal miner safety, drug and alcohol testing, requirements for - HB 404 miners, proclaim May 1 of each year as coal miners recognition day - HJR 101

Creation of certain form to be filled out by employers and employees, responsibility of - HB 89

Education institutions, construction, exempt from paying prevailing wage - HB 64

Electrician licensing, exempting employees of natural gas pipeline facilities from - HB 385

Employers, health benefits for - HB 98

Genetic testing, prohibition against employer's use of - HB 49

Human trafficking - SB 11

Illegal aliens, prohibit employment of - HB 150

Labor organization, mandatory membership or financial support prohibited, penalty - HB 38

Limited Liability Company Act, omnibus revisions - HB 349

Minimum wage revision - HB 378

OSH standards, board meetings and duties of the chairman, provisions for - HB 387

Prevailing wage, repeal of - HB 217

Sex-based wage discrimination, prohibited on comparable jobs - HB 399

Sexual orientation and gender identity discrimination, prohibition of - SB 99 orientation and gender identity, discrimination based on, prohibit - HB 369

Work injury, heart or respiratory disease in firefighters, create rebuttable presumption for - HB 420

Workers' compensation special fund assessment and membership change of funding commission - HB 388 compensation unfair claims practices, increase penalties for - HB 97

"Regarded As" Cases Are Difficult To Prove

Back in August, 2005, in Logan v. Marathon Ashland Petroleum, LLC, Judge Wilhoit granted summary judgment to MAP in a "regarded as" disability case.  Plaintiff, who has MS, was terminated from her job as a truck driver.  She claimed her termination violated the Kentucky Civil Rights Act in that MAP regarded her as being disabled.  The case is illustrative of the up-hill climb a plaintiff faces when attempting to prove he was discharged because his employer regarded him as being disabled.  Usually in such cases, an employer simply believes the plaintiff cannot perform the particular job the plaintiff is holding, which often does not translate to a class or broad range of jobs.  The following is the conclusion quote from the case:

Ms. Logan simply fails to allege or adduce sufficient evidence that the Defendant regarded her as substantially limited in either a class of jobs or broad range of jobs in various classes, or that Defendant perceived her impairment as severely restricting her ability to perform tasks central to daily life. As such, the Court concludes that Plaintiff has failed to create a genuine issue of material fact that the Defendant regarded her as substantially limited in the major life activity of working, as required to state a disability discrimination claim under the “regarded as” disabled prong of the KCRA.

The full decision is at: Download MarathonSJ.pdf

 

Union Membership Levels Off

As reported at USATODAY.Com, Long-declining union membership levels off.

Louisville Braces For Monday's Announcement By Ford

The Courier-Journal Article: Ford workers brace for cutbacks, contains some sobering news.  If Louisville loses any jobs, one might expect to hear about it in the on-going Right To Work debate.

New USERRA Regulations

The Department of Labor has finally issued its long-awaited regulations (“the Regulations”) implementing the Uniform Services Employment and Reemployment Rights Act (“USERRA”). The Regulations, codified at 20 C.F.R. § 1002, are structured in a question and answer format similar to the regulations accompanying the Family and Medical Leave Act. The Regulations are easy to understand, particularly since they provide examples to explain some of the more difficult
concepts.

Click here to read a Frost Brown Todd summary of the regulations.

Click here to see the Department of Labor web-page containing the regulations.

A Proposed "Wal-Mart" Bill In Kentucky

Kentucky House Bill 98 is a copy cat of the so-called "Wal-Mart" bill recently enacted in Maryland. It would require employers with 10,000 or more workers in the state to spend at least 8 percent of their payrolls on health insurance or else pay the difference into a state Medicaid fund. 

Judge Russell Upholds Arbitrator's Overtime Decision

This week in Emhart Tecknologies LLC v. IAM, Local 2396, Judge Russell upheld an arbitrator's award in an overtime dispute.  The case focused on whether a "day" was a calendar day or a 24 hour period.  The arbitrator concluded the latter, which Judge Russell found to be a reasonable interpretation.  The 8 page decision can be viewed at  Download EmhartArbDecision.pdf.

$1.15 Million Retaliation Verdict Against The TSA

Click here to see the Kentucky.com report of a $1.15 Million employment retaliation verdict against the federal Transportation Security Administration.  The case was tried in Louisville.  The jury gave the plaintiff $500,000 for lost wages and $650,000 for emotional distress.  It is no fun being on the wrong end of a retaliation suit.  Note in this case the jury rejected plaintiff's discrimination claim, but found in her favor on her retaliation claim.  Lesson learned: as hard as it is, employers must be ever vigilant to protect persons who complain of discrimination/harassment from retaliation, even if the complaint lacks merit.  Not to say you can't discipline a complete liar, but doing so is risky and you'd better have your ducks in a row.  If you've ever wondered what a $1.15 Million verdict looks like, click Download Younisverdict.pdf. 

Proposed Premium Assistance For Small Businesses

The Governor is proposing a plan under which certain small businesses would receive between $40-$60 per employee per month to help cover the cost of health insurance.  In the Courier Journal article, a "small business" is defined as between 2 - 25 employees; while at the Governor's home page, a "small business" seems to be defined as under 50 employees.  We'll see where this goes.

Another "Honest Belief" Case

On the heels of two "honest belief" cases yesterday, today in Hairston v. AK Steel Corp., the 6th Circuit affirmed summary judgment for AK Steel in a race discrimination case, finding, among other things, that the plaintiff could not establish pretext because he could not overcome AK Steel's "honest belief" defense.  The 6th Circuit also ruled the district court did not abuse its discretion by not compelling AK Steel to produce documents relating to employees who were not situated similarly to plaintiff.

Good Day For UPS In The 6th Circuit

Yesterday the 6th Circuit affirmed summary judgment for UPS in two cases: (1) Morton v. UPS and (2) Joostberns v. UPS.  Both cases focused on the plaintiff's inability to produce evidence that would allow a reasonable jury to conclude that the non-discriminatory reasons offered by UPS for the respective discharges were pretextual.  Both cases also contain a good discussion of the "honest belief" rule, i.e. "as long as an employer has an honest belief in its proffered nondiscriminatory reason for discharging an employee, the employee cannot establish that the reason was pretextual simply because it is ultimately shown to be incorrect."  There is also a nice discussion in Joostberns regarding pleading sufficiency requirements. One aspect of Plaintiff's FMLA retaliation claim was dismissed on inadequate pleadings grounds.  This is not a defense that often wins; but as Joostberns illustrates, it is still worth making if Plaintiff fails to state in his/her complaint an event which he/she later claims to be an instance of retaliation/discrimination.  Both cases are unpublished.

"Permanent" Replacement Of Striking Employees

Here is an article discussing an increase in the use of permanent replacements for striking employees.  My only nit to pick with the article is that it does not clearly explain that a striking employee is still an employee of the struck company, even if he has been permanently replaced.  That is, being "permanently replaced" is not equivalent to being discharged.  Although one could argue with some nuances in the following statement, for the most part the NLRB nicely summarizes the position of permanently replaced striking employees in the following paragraph, which comes from the NLRB's Basic Guide to the National Labor Relations Act:

[Economic strikers] retain their status as employees and cannot be discharged, but they can be replaced by their employer. If the employer has hired bona fide permanent replacements who are filling the jobs of the economic strikers when the strikers apply unconditionally to go back to work, the strikers are not entitled to reinstatement at that time. However, if the strikers do not obtain regular and substantially equivalent employment, they are entitled to be recalled to jobs for which they are qualified when openings in such jobs occur if they, or their bargaining representative, have made an unconditional request for their reinstatement.

The most dangerous jobs in America

Interesting Forbes article on "The Most Dangerous Jobs In America."  Surprisingly, UK Mens Basketball Coach did not make the list.

President Makes New NLRB Appointments

From the NLRB press release:

The White House announced late yesterday President Bush’s recess appointments of Ronald E. Meisburg to serve as General Counsel of the National Labor Relations Board, Peter N. Kirsanow to be a Member of the NLRB, and Acting NLRB General Counsel Arthur F. Rosenfeld as Director of the Federal Mediation and Conciliation Service.  They can serve until the sine die adjournment of Congress in 2007 unless the Senate confirms their pending nominations.

"Employee Choice" Initiative Announced

Click here to read the press release regarding the Governor's "Employee Choice" (right to work) initiative.  The Governor has enlisted state and local community leaders to explain the benefits of a right to work law.

6th Circuit Tosses Out A $1,000,000 Sexual Harassment Verdict

Today in Rudd v. Shelby County, Tn., the 6th Circuit ordered that Shelby County be granted a judgment dismissing Rudd's sexual harassment suit.  Although the case is unpublished and originated in Tn., it is still worth checking out because the Court does a nice job distinguishing between co-worker and supervisor harassment claims.  In this co-worker case, the Court held that, although the plaintiff was clearly harassed in a vile manner, Shelby County took prompt and corrective action and therefore no reasonable jury could find it liable.

Sago Mine Accident Q & A

The DOL has issued a Q & A document (click here) to address why the Sago mine was operating given the reported number of health and safety violations issued against the mine.  Although it does not mitigate the grief of those left behind, I think it is enlightening and hopefully will slow those rushing to judgment.   

Right To Work Primer

This General Assembly session you should expect to hear a fair amount of discussion regarding House Bill 38, a proposed Right To Work law.  From the National Right To Work Committee web-site, here is a quick definition and discussion of right to work laws:

What is a Right to Work law?

A Right to Work law guarantees that no person can be compelled, as a condition of employment, to join or pay dues or "fees" to a labor union. Such a law also reaffirms and strengthens the existing federal labor-law provisions that bar hiring discrimination against union members. Section 14(b) of the Taft-Hartley Act affirms the right of states to enact Right to Work laws.  Currently 22 states have passed such laws.  The 22 states are:

Alabama, Arizona, Arkansas, Kansas, Florida, Georgia, Idaho, Iowa, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.

Although the bill probably will not pass, the Governor and Senate leadership have at least made discussing the concept a priority.  To the degree Kentucky competes with other southern states for new companies, it is said we need a right to work law to remain competitive because at least 50% of companies looking to locate a plant in a new state will not consider a state unless it has a right to work law.

6th Circuit Upholds Dismissal of Age & Race Suit

Today in Williams v. Tyco Electric Corporation, the 6th Circuit affirmed the trial court's summary judgment dismissing Williams' age and race discrimination claims (ADEA, Title VII, and KRS 344).  The decision is fairly straight forward and discusses RIF issues.  Williams argued he was not discharged as part of a RIF.  The Court agreed with the employer that Williams was discharged as part of a RIF and therefore to establish a prima facie case of discrimination, beyond the traditional McDonnell-Douglas factors, Williams also had to present additional direct, circumstantial or statistical evidence that age or race was a factor in his termination.  The Court found Williams could not do this.  The Court rejected Williams' statistical evidence because it was based on a small sample size and did not distinguish between employees who left the employer voluntarily and those who were terminated.  Also the Court found the following memorandum did not constitute direct evidence of discrimination:

Please find attached a memo summarizing the staffing situation with the operators in the plastics and stamping departments who have requested severance packages. Even though allowing all employees who have requested the severance will require us to back-fill some positions, I feel this is the best approach. We will be allowing a high percentage of low performers to leave while loosing [sic] only a few good performers, whose average age is about 60. May I proceed with the plan to allow these people to receive their severance and begin soliciting replacements.

The Court explained,

Statements of this type do not constitute direct evidence of age-based bias. Rowan v. Lockheed Martin Energy Sys., 360 F.3d 544, 549 (6th Cir. 2004)(finding that statement made referencing the average age of workers was made in the context of a legitimate concern about approaching retirements and, consequently, did not constitute direct evidence of discrimination).

All in all, a good decision for employers.  Alas, it is unreported, and therefore its usefulness is limited.

Kentucky Unemployment Up In 2005

The Kentucky Office of Employment and Training announced today (click here) that, "Unemployment rates rose in 118 Kentucky counties between November 2004 and November 2005 and fell in two counties."