Alabama Employment Law Report : Alabama Employment Lawyer & Attorney : Daniel J. Burnick : Sirote & Permutt Law Firm

On March 2, 2010, President Obama signed into law the Temporary Extension Act of 2010 which addresses the COBRA subsidy and extends the time employees may file for Federal Emergency Unemployment Compensation.  Under COBRA, the new law extends coverage for those involuntarily terminated from March 1 through March 31, 2010, the eligibility period for the 15 month, 65 percent premium subsidy.  It also permits employees to receive the subsidy if they initially lost their group coverage to to a reduction in work hours and then were terminated after the enactment of this bill.  The law also extends the time period during which terminated employees may file for Federal Emergency Unemployment Compensation from February 28 to April 5, 2010, and extends the time period during which they may claim and be paid emergency unemployment compensation from July 31 to September 4, 2010. 

Practice pointer.  Congress is still considering legislation to  extend these programs through 2010.  Since these benefits were due to expire, and Congress could not agree on a longer term extension, this short term extension was passed so Congress can continue to explore a longer term extension. 

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Last week, I was invited to speak to the Sylacauga Rotary Club.  When asked about a topic, the decision was made to talk about violence in the workplace.  This is a very serious and timely topic, and should be concern to all employers and employees.  One area of workplace violence that is often overlooked is bullying.  Bullying can be a problem that may start out small, but can escalate into a much bigger problem. WebMD published an article on February 22 entitled "Workplace  bullying: How common is it?"  The article focused on accusations in England over the treatment by Gordon Brown of his Downing Street staff.  Workplace bullying includes arguments, rudeness, exclusion of co-workers and unacceptable criticisms.  It may also include cyber-bullying: the use of social networking sites to intimidate, embarrass or otherwise attack co-workers.  The Advisory, Conciliation and Arbitration Service defines bullying as "Offensive, intimidating, malicious or insulting behavior, involving an abuse or misuse-use of power through means intended to undermine, humiliate, denigrate or injure the recipient".  Mind, a mental health charity, lists physical symptoms that can result from workplace bullying, including headaches, sleeplessness, stomach problems, constant tiredness, panic attacks, mood swings, depression and suicidal thoughts.  Subjecting employees to these types of symptoms, over time, can lead to physical violence in the workplace. 

Practice pointer.  Once again, it is important for employers to have proper policies and procedures in place to identify, prevent or react to workplace violence. Training all staff, including supervisors is something that should be done on a regular basis.

ALABAMA SENATE OKS GUNS IN CAR AT WORK.  At Sirote's recent seminar on workplace violence, one of the questions asked dealt with the possession of firearms in the workplace.  The Alabama Senate has passed a bill, by a vote of 26-2, that would permit employees to keep legal firearms in their vehicles on company premises, so long as they are locked out of sight, such as in the glove compartment or trunk.  Electric utilities are exempted under this bill.  I will update the status of this bill as it moves through the legislature.

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The President.  The Department of Labor.  The IRS.  There is a great deal of pressure being exerted on employers to properly classify workers as either employees or independent contractors.  According to Inc.  President Obama's 2011 budget includes funding for an additional 100 IRS employees to help crack down on the misclassification of workers as independent contractors.  It is estimated that this will add an additional $7 billion in revenue over the next 10 years for the government.  The IRS is also beginning a 3 year audit of 6,000 companies chosen by random, rather than issues with the company's returns.  The use of independent contractors can save companies as much as 30% in costs since they don't have to pay for social security and medicare taxes, workers' compensation, unemployment compensation, health insurance, vacation or sick leave.  Last week, USA Today ran an article entitled IRS, States crack down on independent worker status abuse.

The New York Times published an article on February 18 entitled "U.S. Cracks Down on 'Contractors' as a Tax Dodge".  The story referred to a federal study that concluded that 3.4 million workers were illegally misclassified as independent contractors instead of employees.  The attorney general from Ohio believes that there are 92,500 misclassified workers in Ohio alone, costing the state over $363 million in lost unemployment insurance taxes, workers' compensation premiums and income tax revenue.  The article notes that the most frequently misclassified workers are "truck drivers, construction workers, home health aides and high-tech engineers."   Misclassification of workers as independent contractors also prevents those contractors from receiving overtime if they would have been entitled to it if they were properly classified as non-exempt employees. 

Finally, closer to home, a study in Tennessee found that 20% of construction workers in Tennessee were either misclassified as independent contractors or paid under the table. 

Practice pointer.  I routinely am involved in representing clients who misclassify employees, usually unintentionally.  With the looming crackdown in misclassification by the federal government, now is a good time to review the classification of workers to make sure that they are being properly identified as either employees or independent contractors.  Companies that are caught misclassifying employees as independent contractors face enormous financial penalties, including income tax, medicare and social security with holdings, and claims for overtime.

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Last Friday was a busy day in Alabama for employment issues.  Perhaps the calendar was off by a day: it should have been Friday the 13th, not Friday the 12th. 

First, the Birmingham News reported that a federal jury in Birmingham, after a 3 week trial, returned a verdict in the amount of $2.7 million against U.S. Security Associates, Inc, a security guard firm based in Georgia.    According to the article, Jamie Marks sued USSA alleging sexual harassment when a district manager repeatedly propositioned her for sex and inappropriately touched her.   Robert Gordon, writing for the Birmingham News, noted that "One occasion, Hargrove masturbated in front of Marks the lawsuit said."  Marks complained, but was ignored, in part, because Hargrove was having an affair with Mark's immediate supervisor, who witnessed the exposure, but lied during the company's investigation.  Interestingly, Hargrove remains employed with USSA. 

Practice pointer.  Once again, let me say that it is important to have policies and procedures in place, and to follow them!!!  The jury found, as evidenced by the high verdict, serious violations of the law by the supervisor, and the failure of the company to properly investigate and remedy the situation: the supervisor is still employed.

On January 28th, I wrote a blog entry dealing with violence in the workplace.  Tragedy struck in Alabama Friday when a female professor at the University of Alabama in Huntsville, who was just denied tenure, pulled a gun and killed 3 faculty members and wounded 2 faculty members and a staff member.  The accused shooter is a 42 year old Harvard graduate, the mother of 4, married to a geneticist and researcher who also works at UAH, and apparantly accidently shot and killed her brother in 1986.  The shooter and her husband were taken into custody.  In watching the news reports, one student interviewed said that you hear about these situations around the country, but you never expect it to happen to you.  Unfortunately, as we are again reminded, violence in the workplace does strike close to home.  My firm, Sirote & Permutt, is holding a seminar this coming Wednesday, February 17 addressing violence in the workplace,  If you are interested in attending, you can view the invitation here and make reservations to attend.  The seminar will take place in Birmingham, but will be broadcast to our Huntsville and Mobile offices. 

Practice pointer.  Violence in the workplace is a constant threat, and must be dealt with seriously.  It strikes close to home, and is unpredictable.  Companies must prepare for these situations by having the appropriate policies and procedures in place, training the entire workforce, and be forever vigilant to guard against it. 

Last November, I gave a presentation at our year end seminar addressing the H1N1 flu and pandemics in the workplace.  According to the Center for Disease Control and Prevention, in an announcement made Friday, approximately 57 million Americans have contracted H1N1 since April, 2009.  This is about 18 % of the U.S. population.  Almost 12,000 have died, and about 260,000 have been hospitalized.  Although the experts predicted otherwise, adults between 18 and 64 have been hit the hardest, accounting for 58% of the infections and hospitalizations and 76% of the deaths.

Practice pointer.   Although the H1N1 pandemic may be over, other pandemics will hit in the future.  When is unknown.  In order to keep businesses operating during a pandemic, companies must be prepared with the appropriate plan to cover for absent employees, sick employees and perhaps the interruption of normal life (quarantines, disruption of the food supply, school closings, etc.)  Now is the time to prepare by formulating proper procedures and implementing them with the workforce.

This past week, I was invited to speak to the Talladega County Bar Association and gave a presentation on Social Media, including the impact of social media in the workplace.  Interestingly, one of the cases I often refer to in my presentations is a case out of North Carolina where a volunteer fireman was discharged for conduct unbecoming a fireman because his social media site made reference to him and his wife practicing the Wicca religion, and that his wife was bisexual.  One of the attorneys in Talledega has a very similar situation, where an ex spouse allegedly posted on a social networking site that the other ex spouse practiced the Wicca religion and was bisexual.  No, I can't make these things up.  It is important to have a social media/networking policy in the workplace to protect the company, it's employees and to safeguard confidential and proprietary information.

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On February 5, the 11th Circuit decided the case of Robinson v. Tyson Foods.  Robinson worked for Tyson Foods, and resigned in September, 2005 by a letter of resignation stating, in part, that she was subjected to "harassment, racial abuse and intimidation."  In October, 2006, she brought a civil suit against Tyson under Title VII, and claimed compensatory, punitive and liquidated damages.  In April, 2002, Robinson voluntarily dismissed her Chapter 13 bankruptcy cased because she could not make her payments, and filed a second Chapter 13 proceeding.  The plan was confirmed in May, 2002, and the judge ordered, in part, that "the property of the estate shall not vest in the Debtor until a discharge is granted under Section 1328 or the case is dismissed".  In May, 2007, one of Robinson's debtors moved to dismiss the bankruptcy plan because her payments were delinquent.  Before a hearing on the motion, she became current on her payments. In July, 2007, her bankruptcy plan was completed, she repaid all her debts, and she received a full discharge from Bankruptcy.

Tyson took her deposition in September, 2007, and learned that she had not disclosed her suit against Tyson in the bankruptcy court.  Tyson also learned that her husband died in 1997, and she had a workers' compensation claim against her husbands employer when she declared bankruptcy in April, 2002.  That lawsuit was not disclosed either.  The 11th Circuit upheld the trial courts decision dismissing Robinson's claim against Tyson, under the theory of judicial estoppel, which is designed to "prevent a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by the party in a previous preceding".  Since full and honest disclosure in a bankruptcy proceeding is "critical" to the effective functioning of the system, and a debtor has a statutory duty to disclose all assets, or potential assets to the bankruptcy court, and Robinson failed to do so, she was prohibited from pursuing her claim against Tyson.

Practice pointer.  This decision reinforces the need for individuals to be completely open and honest when they file for bankruptcy.  If they fail to disclose an asset, or potential asset, such as a law suit, it may bar them from pursuing those claims not disclosed to the bankruptcy court.  This logic also applies in many unemployment compensation appeals, where claimants' change the reason for termination from what they originally listed on their claim for unemployment, (for example, lack of work)  to a claim under Title VII (for example, sexual harassment).

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Last January, I published an entry addressing the Crawford v. Metropolitan Govt of Nashville decision issued by the Supreme Court.  The Supreme Court held that an employee who responded to questions during an internal investigation is protected by the anti-retaliation provisions of Title VII.  The Supreme Court remanded the case to the District Court in Nashville, and a trial was held 2 weeks ago.  According to an article in the  Chicago Tribune on January 25, Crawford was fired in 2003 after more than 30 years with the school district as the result of her cooperation in the investigation.  "According to court documents, Crawford told investigators Hughes would ask to see her breasts, grab his crotch saying, "You know what's up", and on one occasion pulled her head to his crotch".  Frazier, the HR officer, promised Crawford that she would be protected from retaliation.  On the same day Frazier turned in her report on the allegations finding that no action would be taken against Hughes, Frazier sent a letter to the internal audit department informing them of concerns with the operation of Crawford's payroll department. Crawford has been unable to find another job since her termination in 2003, and she lost her house and car.  She also claimed that her professional reputation had been damaged, due in part to an article in the local newspaper that quoted Metro officials alleging that she might have embezzled money from the department, although there was never a finding of embezzlement.

Practice pointer.  Retaliation can be a very dangerous claim against employers, especially when the facts appear to be as bad as those set out in the Crawford case.  HR professionals must recognize the consequences of retaliating against any employee who is involved in a Title VII investigation, whether they are the accused, the accuser, or a witness.  Supervisory personnel must also be trained not to retaliate in these situations. 

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In 1994, Ron Artest of the Indiana Pacers charged into the stands during a NBA game being played in Detroit, and fought with players and fans.  9 different players were suspended for a total of 146 games, costing those players $10 million in salary.  5 players were charged with assault, and all 5 were found guilty.  More recently, Gilbert Arenas and Javaris Crittenton, of the Washington Wizards, were suspended for the remainder of the NBA season as the result of a dispute over a card game on a team flight which escalated into guns being brought into the locker room by both players.  Arenas will lose over $147,000 per game, while Crittenton will lose over $13,000 per game.  Too often, we hear about disgruntled ex-employees, distraught spouses or ex-spouses, or others entering places of business, courts, schools, and even basketball arenas, armed with weapons, and "going postal", killing and injuring innocent people.  Since the beginning of the year, we have heard about people getting killed in Kennesaw, Georgia and St. Louis.  A total of 5 people lost their lives, and 8 were injured.  The FBI estimates that approximately 1 million people are exposed to some form of workplace violence every year. 

Violence in the workplace has no bounds, and can impact any workplace, at any time.  The Houston Chronicle recently published an article entitled "Employers can minimize risk of workplace violence.". The article listed 8 steps that can be taken to prevent or minimize the risk of workplace violence.  These steps are:  Accept reality.  Use effective pre-employment documents and conduct background checks.  Establish policies on workplace violence.  Conduct substance abuse testing.  Develop procedures for investigating threats.  Training supervisors and employees.  Implement an employee assistance program.  Audit and improve security measures. 

In addition to the tragic loss of life and devastating injuries, violence in the workplace can result in severe financial consequences to companies when it occurs.  Employees being killed or injured.  Ongoing counseling.  Lost work time and decreased productivity.  Bad publicity, often nationally.  Workers' compensation lawsuits.  Claims for negligent hiring/retention/supervision. 

Sirote & Permutt is hosting a  seminar on Workplace  Violence on Wednesday, February 17th in our Birmingham office, and it will be simulcast to our Huntsville and Mobile offices.  If you are interested in attending, please follow this link for more information and RSVP details:  seminar  

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The Department of Labor released 3 model notice packages to help group health plans and employers provide notice on the availability of the extension of COBRA continuation coverage under the American Recovery and Reinvestment Act.  The American Recovery and Reinvestment Act was amended by the Department of Defense Appropriations Act of 2010 and extended the eligibility period for 2 months and the duration from 9 to 15 months.  Eligible individuals pay only 35% of their COBRA premiums, and the remaining 65 percent is reimbursed to the employer through a tax credit.  According to Phyllis C. Borzi, assistant secretary of the Labor Department's Employee Benefits Security Administration, "Our action today gives workers and their families useful information to keep important health benefit coverage during these challenging economic times.  We also are making it easy for employers and plans to meet their obligations to provide the notices".  The Department of Labor will be holding a free webcast on January 22, from 1 to 3 p.m (EST) to help employers, plan administrators and service providers comply with the notice requirements.  You can register on line at www.dol.gov/cobra or call Sandra Lynch at 202-693-8671.

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This week, in Harrison v. Benchmark Electronics Huntsville, Inc., the 11th Circuit reversed the trial court's summary judgment in favor of Benchmark (BEHI), and remanded the case for a jury trial.  Harrison was employed by Aerotek, a company that places temporary workers at BEHI.  He worked as a "debug tech", dealing with electronic boards.  Harrison suffered from epilepsy (since the age of 2) and took barbiturates to control his condition.  BEHI had a practice of hiring temporary workers as permanent employees if a supervisor believed that they would meet BEHI's needs.  Harrison submitted an application and took a pre-offer drug test, that was positive for barbiturates.  Although the testimony was in dispute, the evidence most favorable to Harrison indicates that his supervisor, Anthony, found out about the positive drug test and confronted Harrison about it.  Harrison provided a valid prescription, and Anthony called the MRO and passed the phone to Harrison and listened in as he answered questions from the MRO, including the fact that he took barbiturates due to his epilepsy.  After this conversation was overheard by Anthony, Anthony told HR not to prepare an offer letter for Harrison.  Anthony also advised Aerotek not to return Harrison to BEHI, and Aerotek complied, telling Harrison he had a performance and attitude problem and had been accused of threatening Anthony.  Harrison was terminated by Aerotek.

Harrison filed a charge with EEOC, and the EEOC determined that he did not have a disability and thus did not investigate the improper medical inquiry claim.  A right to sue letter was issued to Harrison, and he filed his suit.  The court first examined whether Harrison, a "non-disabled individual", can state a private cause of action for a prohibited medical inquiry in violation of Section 12112(d).  The court found that such a cause of action exists.  The court further found that an employer may conduct follow-up questioning in response to a positive drug test, but these questions are limited by Section 12112(d)(2), which prohibits disability-related inquiries.  "A reasonable jury could infer that Anthony's presence in the room was an intentional attempt likely to elicit information about a disability in violation of the ADA's prohibition against pre-employment medical inquiries". 

Practice pointers.  Although this case was decided under the ADA prior to the 2008 amendments, the logic is still applicable.  Employers must limit their pre-offer inquiries, even with a positive drug test, to non-disability related questions.  Of course, this is very difficult to do.  Additionally, as I have often written, it is important to train supervisors as to what they can and cannot do in relation to the ADA (as well as other employment laws).  The timing of Harrison's termination is certainly suspect.

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