Author: Richard S. Zackin

Third Circuit Decides Good Faith Belief of FMLA Abuse Justifies Termination

There are occasions when an employer becomes concerned that an employee on leave under the Family and Medical Leave Act (“FMLA” or “the Act”) is using the leave for purposes not authorized by the Act. That situation was presented in Capps v. Mondelez Global, LLC, a recently issued opinion from the Third Circuit Court of Appeals. There, the Court held that an employer’s good faith belief that an employee was abusing his authorized FMLA leave constituted sufficient grounds on which to terminate the employee. The case provides valuable guidance as to how employers should proceed in such situations. The Facts Frederick Capps worked as a dough mixing machine operator for Mondelez Global (“Mondelez”). Because of a blood flow condition, Capps underwent bilateral hip replacement. At times thereafter, he suffered from severe leg pain and was continuously recertified approximately every six months for intermittent FMLA leave for his condition. On the evening of February 14, 2013, Capps was arrested for driving under the influence and spent the night in jail. He had not reported to work that day having called Mondelez’s FMLA message line complaining of leg pain. On August 7, 2013, Capps pled guilty to a DUI charge and spent 72 hours in jail immediately following the guilty plea. The company did not have a policy...

Eleventh Circuit Widens Circuit Split on Accommodation Issue

Consider the following scenario: Because of a disability an employee is unable to perform an essential function of his or her current position and there is no reasonable accommodation that will enable the employee to remain in that position. The disability, however, will not prevent the employee from performing the essential functions of an open position for which the employee is qualified. A number of courts presented with this scenario have had to decide the extent to which the Americans With Disabilities Act (ADA) mandates that the employer assign the disabled worker to the open position as a reasonable accommodation without requiring the employee to compete for the position with other qualified candidates. Recently, in Equal Employment Opportunity Commission v. St. Joseph’s Hospital, Inc., the United States Court of Appeals for the Eleventh Circuit joined the Eighth Circuit in concluding that there is no ADA violation if the employer requires the disabled employee to compete for the open position. Other courts, however, including the Seventh, Tenth, and D.C. Circuits have concluded that, in most instances, a qualified disabled employee should be placed in the open position as a reasonable accommodation. The Seventh Circuit’s decision is the subject of an earlier blog. The St. Joseph’s Hospital Decision The EEOC brought suit on behalf of Leocadia Bryk, who worked as...

The Third Circuit Goes Its Own Way on ADEA Disparate Impact Claims

The Age Discrimination in Employment Act (ADEA) protects from discrimination of employees who are at least 40 years of age. Recently, in Karlo v. Pittsburgh Glass Works, the United States Court of Appeals for the Third Circuit departed company with three of its sister Circuits by holding that plaintiffs asserting a claim of “disparate impact” under the ADEA may establish a disparate impact with comparisons between subgroups of employees and need not show that a challenged employment practice has had an adverse impact on employees 40 years of age or older compared to its impact on employees under 40. Thus, the Court permitted to go forward with a disparate impact claim based on a comparison between employees at least 50 years of age with employees under 50. The decision will have a profound impact on employers’ assessments of their potential ADEA liability for disparate impact claims and on the way ADEA disparate impact claims are litigated in the Third Circuit. Background To establish a claim of disparate impact discrimination under the ADEA, a plaintiff must show, through statistical evidence, that the employers implemented a facially age-neutral employment practice that fell more harshly on the protected group. If this showing is made, the employer can defeat the claim by demonstrating that the practice in question is...

Ninth Circuit Holds Class Action Waivers Illegal Under the NLRA

On August 22, 2016, in Morris v. Ernst & Young, LLP, the Ninth Circuit Court of Appeals joined the Seventh Circuit Court of Appeals in holding that class action waiver provisions in arbitration agreements governing employment disputes are illegal under the National Labor Relations Act (NLRA or the Act) because these waivers interfere with the right of employees to engage in concerted activity protected by Section 7 of the Act (Section 7). The holdings of these courts are in indirect conflict with an opinion of the Fifth Circuit Court of Appeals, which upheld the validity of such waivers in the face of a challenge under Section 7. Employers in jurisdictions whose courts have not yet decided this issue, and who employ such waivers in their arbitration agreements or otherwise, should be prepared for attacks on their arbitration agreements by employees seeking to bring class or collective actions or by the National Labor Relations Board (NLRB).

N.J. Supreme Court Invalidates Agreements to Shorten the LAD’s Statute of Limitations

On June 15, 2016, the New Jersey Supreme Court, in Rodriguez v. Raymours Furniture Company, Inc., held that an agreement by an employee to bring claims against his employer within six months of the allegedly wrongful employment action was unenforceable insofar as the agreement applied to claims brought under the New Jersey Law Against Discrimination (“the LAD”). In 1993, the Court had held that New Jersey’s general two-year statute of limitations for personal injury actions provides the appropriate limitations period for LAD claims. In Raymours, the Court ruled that the employer’s attempt to reduce this limitations period to six months undermined the LAD’s specific enforcement scheme for the elimination of discrimination and thus, for public policy reasons, could not be judicially sanctioned. In addition, the Court found that the particular agreement at issue, set forth as part of the boilerplate in the employer’s standard employment application form, constituted an unenforceable contract of adhesion.

Second Circuit Rejects the Department of Labor Test for the Lawful Employment of Unpaid Interns

In a much anticipated decision in Glatt v. Fox Searchlight Pictures, Inc., the United States Court of Appeals for the Second Circuit recently adopted the “primary beneficiary” test for determining whether individuals performing services for no compensation have been properly classified as “unpaid interns” or are, in fact, “employees” who have been improperly denied wages mandated by the Fair Labor Standards Act (FLSA). The district court, in an opinion that received a great deal of attention, had ruled that the plaintiffs were employees for FLSA purposes, applying the factors enumerated in the test proposed by the U.S. Department of Labor (DOL). The Second Circuit rejected the DOL’s test and, accordingly, reversed the district court’s order granting the plaintiffs’ motion for partial summary judgment and their motion to certify a collective action.

Supreme Court Rules an Employer’s Failure to Accommodate a Job Applicant’s Religious Practice Violates Title VII Without Proof the Applicant Requested An Accommodation

In its much anticipated decision in Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc., the U.S. Supreme Court has held that a prospective employee who was turned down for a job because she wore a headscarf, which the employer suspected was worn for religious reasons, can proceed with her claim of religious discrimination under Title VII of the Civil Rights Act of 1964, although when she applied for the job the applicant never requested permission to wear the headscarf as an accommodation to her religious practices. Employers should be aware that the Court’s decision (1) imposes on an employer an affirmative obligation to reasonably accommodate the religious practices of its employees and prospective employees and (2) exposes an employer to potential liability for intentional discrimination, and thus for compensatory and punitive damages, for failing to make such accommodations.

Supreme Court Rules ERISA Statute of Limitations Does Not Bar Breach of Fiduciary Duty Claim Challenging 401(k) Plan Investments Made More Than 6 Years Before Filing of the Claim

The statute of limitations governing breach of fiduciary duty claims brought under the Employee Retirement Income Security Act (“ERISA”) provides that such claims are untimely if not brought within 6 years after “the date of the last action which constituted the breach or violation” or “in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation” (29 U.S.C. § 1113). In Tibble v. Edison International, the U.S. Supreme Court ruled that ERISA’s statute of limitations did not bar plaintiffs from pursuing their breach of fiduciary duty claim arising out of investments made by their employer’s 401(k) plan, although the investments were made more than 6 years before plaintiffs filed their claim. The Court held that ERISA plan fiduciaries have an ongoing duty to monitor plan investments and to remove imprudent investments. As long as the alleged breach of this continuing duty occurred within 6 years of suit, a claim challenging a fiduciary’s failure to act will be timely. The Court rejected the argument that only “a significant change in circumstances” triggers the duty to remove imprudent investments.

Sixth Circuit Upends EEOC Victory in Telecommuting Case

We previously reported on a decision by a panel of the United States Court of Appeals for the Sixth Circuit in Equal Opportunity Employment Commission v. Ford Motor Co., in which the panel held that the EEOC was entitled to a jury trial on its claim that Ford discharged an employee in violation of the Americans with Disabilities Act (“ADA”) after it denied her request to work from home 4 days per week as an accommodation for her irritable bowel syndrome (“IBS”). In an en banc decision the Sixth Circuit has now reversed the original panel’s decision, concluding that the district court properly granted Ford’s motion for summary judgment on the ADA claim. In so ruling, the Court credited Ford’s business judgment that the employee’s presence in the work place was an essential function of her job, and thus her request to telecommute four days per week was not a request for a reasonable accommodation to which Ford had to accede. The EEOC had heralded the original panel’s decision as a major victory. The Sixth Circuit’s en banc reversal of that decision should be cause for equal celebration by employers.

U.S. Supreme Court Requires EEOC to Attempt Conciliation Before Suing

In Mach Mining LLC v. Equal Employment Opportunity Commission, the United States Supreme Court was presented with the issue of whether the EEOC must attempt to conciliate an employer’s alleged violation of Title VII of the Civil Rights Act of 1964 before initiating a lawsuit against the employer and, if so, to what extent a court may review those conciliation efforts. The Court concluded that the EEOC must attempt to engage in conciliation, but that the scope of a court’s review of the EEOC’s efforts is narrow. Post-Mach Mining, an employer that attempts to challenge a lawsuit brought by the EEOC on the grounds that the agency’s conciliation efforts were insufficient will be fighting an uphill battle.